October in Review - OSOM Crypto Autopilot

October has concluded so we wanted to let you know what the month looked like for your Crypto Autopilot and provide a long-term outlook according to our model account. You can also check out additional insights within the app on the Autopilot page.

First things first: Just like you, we are all well-aware of the downward performance of the Autopilot since the highs of early September. But it is important to look at it from the greater context of the crypto market and remember that the Autopilot is optimized for the longer term. Not 2 months. Altcoins have generally been underperforming while Bitcoin has been taking center stage and vice-versa. And while the performance in BTC is hurt by BTC-dominance, when you look at it in EUR terms, the Autopilot is buoyed by the BTC rally.

We witnessed this on a smaller scale over the summer and many times throughout the history of crypto markets. Bitcoin season and altcoin seasons tend to occur in cycles. Between November 6, 2019 and January 6, 2020 and between February 13 and March 16, the Autopilot’s performance also followed the market's downward trend, but as indicated in the chart, the Autopilot is generally better at preserving its gains compared to alternative strategies or when compared to holding Bitcoin alone. We have seen the Autopilot bounce back every single time. Furthermore, the Autopilot is also much better at exposing itself to smaller, promising coins. If you take the long-term view, it’s a robust diversification strategy. Last but not least, we wanted to include the fact that our own initial BTC allocation continues to be managed by the Autopilot and none of the key team members have withdrawn their personal BTC. Several team members have actually added more by “buying the dip”.

Charts of the the long-term view and how the Autopilot fares against other strategies:

Looking at September and October, the negative performance against BTC was driven by about 20 tokens. This is unsurprising as virtually every currency in the universe dropped significantly.

Why does the Autopilot seem to be moving in the opposite direction of Bitcoin in the app?

The answer to that question is that this is a recurring short-term phenomena. If the global crypto market cap doesn’t move much while the price of Bitcoin increases, it means that the money going into Bitcoin is not new money to the crypto sphere. It is simply a reallocation of value from altcoins to Bitcoin. Since the Autopilot can only hold 30% of any asset, it can’t completely move into Bitcoin to follow the trend. But historically, we’ve witnessed that over the weeks and months that follow, this rising tide lifts all boats, therefore all asset prices benefit, sometimes in much greater proportions than Bitcoin. It is not easy to time such tides, and therefore, it may be wise to always hold some altcoins.

The Autopilot offers balanced and optimal exposure to crypto markets, as it always has. But if you’d rather go fully into BTC or ETH, OSOM Finance does offer a very competitive exchange service.

What interesting moves did the Autopilot make?

  • With the DeFi frenzy coming to an end (perhaps just for now), the list of coins and tokens that the Autopilot can take positions in did not change much in October. We added Uniswap (UNI) and replaced LEND for AAVE. We also removed MCO from the portfolio.

  • At 29.1%, BTC is currently your biggest position. It has been the biggest position for the whole month.

  • The Autopilot currently holds positions in 9 altcoins in an addressable universe of 42. We do not like revealing the Autopilot’s positions as doing so could lead to copycat trading, but since many of you have requested specifics, we’ve decided to provide more information. The holdings as of October 31 are as follows:

Crypto happenings in October

  1. It has been a bit of a rough ride for the former summer darlings in the DeFi space.

  2. Paypal announced that it will let you pay with Bitcoin. You won’t be able to transfer Bitcoin out of Paypal and the fee structure will be important, but the news still shot up the price of BTC..

  3. Could the Google antitrust lawsuit help usher in the Web 3 revolution?

  4. It feels like all central banks are thinking about Central Bank Digital Currencies (CBCD). From the likes of Japan, Europe, US, Bahamas, Switzerland, the Bank of International Settlements (BIS)...simply run a search on the news - it’s crazy. Though far from decentralized crypto, it’s still a bit revolutionary.