Vikara December 2023 Update: Global Rebalancing and a Digital Asset Surge

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Vikara returned ~88% on a gross basis in 2023, comparing favourably to the S&P500, NASDAQ and the magnificent seven which returned 25%, 56% and +110% respectively. We are in the early innings of digital asset adoption and are very excited about what is to come in 2024.

It is hard to believe global equities, real estate, and commodity markets at or close to their highs, while digital assets aren’t. Between ETF approvals, the Bitcoin halving, lower rates, a weaker USD, improving inventory cycle, a US election year, and Chinese stimulus, what’s not to love? 

Digital asset active users continue to grow (Chart 1), global legislation is racing to keep up and capital is flowing into the space. Ironically, it is western investors that continue to drag their feet and remain under allocated. A wealth transfer from boomers to millennials is happening in real time.

We continue to educate investors all over the world about the formation of this global capital market (digital assets) and the opportunity to own the infrastructure layer that will form the basis of the internet in coming years. Many continue to dismiss it because they “still don’t understand it”. 

We encourage our readers to spend time over this holiday period learning about digital assets. It isn’t going away. It is accelerating. Ignorance is no longer a reasonable excuse. The opportunity for allocators is incredible and the time to allocate is now. 

If the above chart (Source: Token Terminal) was users of a payments platform on the NASDAQ, the stock would be making all-time highs. If it was an order backlog of a semiconductor business, it would be on an astronomical multiple. But because digital assets are misunderstood and full of retail capital, fundamentals ≠ price.

There is momentum building everywhere, except the mainstream western newspapers. The sophistication in the industry is improving, with tokenomics models investor focused and fundamental dashboards helping determine future price performance. 

Sadly, a majority of people still don’t believe that digital privacy is important, that there is any benefit to self-custody of assets, or that the belligerent printing of cash from governments is an issue. We respectfully disagree on all of these points.

Unfortunately, most will understand these issues better as central bank digital currencies are rolled out, carbon emission taxes are overlaid on societies and capital controls can be used to ensure western investors cannot opt out. Don’t be late to this realization. 

We have shortened this update due to the time of the year. We hope you all have a fantastic holiday season and a prosperous 2024. Thanks for your continued support.

To access the full report, please download the PDF.

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