Market Commentary

Castle Fund Partners, LP 3rd Quarter Performance Update 2020

Dan Hoover
July 1, 2020

Dear Castle Limited Partners:

This is my second opportunity to address all of the partners since becoming yourChief Investment Officer in March. As many of you know, I became a partner in the fund in 2018 and interacted with the team on a regular basis. I am proud of the enormous strides and numerous improvements in many areas that are outlined below. 

On behalf of the entire Castle team, we thank you for your continued support.

Peter Eberle

Market Commentary

Institutional adoption of Bitcoin made significant advances in the quarter, withGoldman Sachs appointing a global head of digital assets just weeks after their research division published a report which seemed to be highly skeptical of the asset class. 

In another major move, the publicly-traded business intelligence software companyMicroStrategy transitioned their corporate treasury to Bitcoin as their primary reserve asset (see article from our Brian Friel here for more detail). 

Finally, payments company Square announced an investment of $50 million intoBitcoin, representing approximately 1% of their total assets at quarter end. SquareChief Financial Officer Amrita Ahuja stated, "We believe that bitcoin has the potential to be a more ubiquitous currency in the future".

Fund Commentary

In the third quarter, the Fund returned 0.88% net. YTD the Fund has returned21.32%. 

The fund trading strategy performs well when strong up or down trends are established as was the case in late July when a breakout occurred above 9100. The performance of the fund suffers during range bound trading, especially when false breakouts occur, as was the case in early September. As we expect volatility inDigital Currencies to continue through the election period we have put into placeless aggressive trading rules to avoid false breakouts and false breakdowns which should mitigate these issues going forward.

Upcoming Developments

Please look out for an invitation from us in early December for a year-end recap and strategy update discussion. 

Our investment team has begun publishing weekly articles on LinkedIn, covering a variety of market and investment topics. These can be found on the firm’s LinkedIn page ( 

Our registration process with the Commodity Futures Trading Commission (CFTC)continues to move forward. Upon completing this registration process, the Fund will be able to more broadly use Bitcoin futures (and the options traded on those futures) to reduce trading costs and improve efficiency in implementing the Fund’s trading strategy. 

For important disclosures regarding the above, please see