Under the Hood - August 2022 - Crypto Autopilot

DateSeptember 01, 2022
Reading Time7 min
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Mathieu Hardy
Chief Development Officer
It's Powell's economy. We just live in it.

This month saw the USA have a big impact on Crypto. First, the FED announced it was going to make it hurt until inflation was under control. Then, in a "historical-first", we saw the sanctioning of a smart contract. It was all a little perplexing to watch.

The result is that - unlike in July - all markets are down, crypto included. The positive news is that we didn't go back to the lows of mid-June, so the bottom might be behind us 🤞🕯️🍀. But there are some who think we're headed for a central-bank-induced recession. This would mean further short-term pain for investors. 🤷 The long-term investor shouldn't really care much either way and have planned for it.


For those who might be new here: OSOM is the Crypto Wealth Manager with all you need: wallets, an exchange, a Crypto Robo-Advisor, DeFi Earn to lend stablecoins in Decentralized Finance, and Crypto Strategies. For individual and companies. OSOM is licensed in Estonia, secure, trusted by thousands and was recognized by 4 industry awards in 2021 alone.

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TL;DR
TL;DR
  • The OSOM Crypto Autopilot € performance was -8.79% while the ₿ performance was 4.29%

  • The OSOM Crypto Autopilot holds: BNB: 30.2%; XRP: 26.6%; BTC: 12.1%; MKR: 11.6%; CHZ: 8.2%; LTC: 8.2%; XLM: 2.2%; EOS: 0.9%

  • The news we highlight is: the effect of the Jackson Hole meeting in late August, the Coinbase-Blackrock partnership, OFAC's sanction of a smart contract address, and "The Merge".

  • We also share some good things and internal news: our better referral program, our crypto thesis, how we crush other passive investing strategies however you want to look at it, and the upcoming OSOM Substack Subscription for our 🇺🇸 & 🇦🇺 audience.

And for the details, read below ⬇️ If you don't want to read it 👀, we can deliver it to your ears in a couple of days! 🎶 Just sign up for the podcast. We also have it on Youtube if you don't have a podcast app. And if you lose it in your mailbox, it's on our blog.

🔬Markets

🔬Markets: It’s Powell’s economy. We just live in it.

➊ The Global Market Capitalisation of Crypto is back to a little below a Trillion €. That's after losing about 8% since the start of the month.

The "1 Trillion" mark held until August 27, but Jerome Powell's address on Aug 26 at Jackson Hole's economic symposium had an adverse effect on all markets. We have not re-tested the lows of mid-June, but there is no euphoria either.

Sentences like this one depressed the mood:

"Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation."

-- J.Powell, Aug 26, 2022. (emphasis is ours)

Bitcoin was amongst those that suffered the most as it lost 12.61% of its value over the month. It closed the month a little under €20K.

➋ Looking at the Market Capitalization of the Top200 Crypto excluding stablecoins, the loss was nearly 14%. If we exclude Bitcoin, from that Top200, the losses are 8.44%

➌ The OSOM Crypto Autopilot did better than the Top200 index, the Top5 index, or the Top10 Index. This month the € performance was -8.79% while the ₿ performance was 4.29%.

Since 26 September 2019, that’s a 417.55% performance in € and 95.33% in ₿.  That’s 75.20% and 25.66% annualized, respectively.

Since 26 September 2019, that’s a 417.55% performance in € and 95.33% in ₿. That’s 75.20% and 25.66% annualized, respectively.

🐂 As a reminder, we shared our thesis on where we think Crypto is going, we made a list of use cases and shared a list of further readings.

🚀🧑‍🚀 Before we dive deep, did you check out our benchmark last month? This is the performance comparison over time, this is how much better the returns are (veeery close to 2x those of BITW10), and this is the Alpha.

🤿 Autopilot Deep-Dive

🤿 Autopilot Deep-Dive

The OSOM Crypto Autopilot had a quiet month. We added the Lido DAO token (LDO) to the list of assets that can be invested in, and no assets were removed.

💰 What are the holdings in the Autopilot Exactly?

BNB: 30.2%; XRP: 26.6%; BTC: 12.1%; MKR: 11.6%; CHZ: 8.2%; LTC: 8.2%; XLM: 2.2%; EOS: 0.9%

BNB: 30.2%; XRP: 26.6%; BTC: 12.1%; MKR: 11.6%; CHZ: 8.2%; LTC: 8.2%; XLM: 2.2%; EOS: 0.9%
📅 August news

🏎️ What are the coins driving the performance?

BNB and XRP were the 2 largest positions throughout the month. But when it came to driving the performance, it's actually BNB, CHZ, and LTC that led the charge.

CHZ went from 2 to around 10% of the portfolio and had a very good month, with a +76.2% increase vs ₿.

KLAY and MKR were the only two to not offer a positive ₿ performance this month.

📅 Crypto News & Happenings in August - Month in Review

It was not a super-busy month, but the little that did happen was pretty important. So let's review events, roughly in the order that they happened in.

➊ On August 4, the month was off to a good start for Crypto as Coinbase announced that it was partnering with BlackRock to offer crypto services to institutions. Blackrock is a behemoth in finance managing nearly US$ 7 Trillion in assets. So it's definitely interesting to see them looking at building crypto capabilities.

➋ Then, on August 10 everyone was shaken by the news that "OFAC" - the division of the US Treasury that takes care of sanctions - had put the smart contract address of the Tornado Cash app on its list of sanctioned entities. Fear further gripped the Ethereum community when one of the Tornado Cash developers was arrested in the Netherlands on apparently 0 charges.

This is troubling on many levels:

  • It's the first time "OFAC" sanctions a piece of software, and many are wondering if they even have the legal right to do so. 

  • It raises questions for miners and validators about the need to "censor" themselves and refuse to validate blocks that contain Tornado Cash-related transactions. Thereby possibly undermining the "censorship resistance" and "credible neutrality" of the Ethereum Network.

  • It raises the question of whether or not users of the Ethereum Network - and people transacting more broadly - are allowed some privacy or if we are headed for a "financial panopticon". On the one hand, the declaration of human rights would indicate that people are entitled to privacy. On the other hand, government agencies seem to want to have the right to read all of your transactions with no warrant or reasonable suspicion. So it looks like we might be heading towards a bit of a repeat of the Crypto wars.

For more information on this topic and on the topic of decentralization in general, we can only recommend that you listen to this conversation with some of the best crypto lawyers.

➌ In the midst of all of that, on August 11 the Goërli Testnet went to a "merge rehearsal" and it all went fine, which led the core devs to schedule the actual mainnet merge 🐼. It will be on September 15. If you want to brush up on what that means, here is a good 16 min video on the merge.

We talked last month about the fact that Full ZK-rollups are going to be coming to the Ethereum network before the end of the year. Let us mention it again because we are very excited! ZK (for Zero-Knowledge) proofs are some of the most exciting math we've ever seen (the other being compounded interests). If you don't know what they are and want to learn more, we found a good video that "explains it like I'm 5". Give us a follow while you're at it.

🤝 A couple things before we part

NEW!! If you like what we are doing but can't use our products because you are in a country we don't support, we have a new solution for you: the OSOM Substack Subscription. We have adapted the list of investable assets for exchanges available in the USA 🇺🇸 and Australia 🇦🇺; and will be emailing rebalancing actions to subscribers weekly.

You'll need to do some manual work to rebalance your portfolio, but at least you'll have an A.I. on your side!

💸 🎁 It's all over our social media accounts and probably also already all over your inbox, but in case it was still too subtle let us tell you again: Our referral program has been updated. You can refer as many people as you want, and there's no cap on how much you can make! You can choose between a fixed referral bonus or share in our revenues from the people you refer 🤑

Dollar-Cost Averaging is nearly universally regarded as the best strategy for long-term investors. By creating a standing order with your bank, you can entirely automate the deposits in OSOM. You can start from about 45€ in the Autopilot and 30€ in DeFi Earn. Daily, weekly, or monthly, it's always up to you!

That's all for this month! 👋As always, thank you for your trust. Feel free to let us know if you have any questions, ideas for how we can improve - or anything else - by replying to this email!

And as Steven Dubner always says: Take care of yourself and, if you can, someone else, too.


This is not investment advice, nor a solicitation. Crypto markets possess a high level of risk, including volatility and regulatory uncertainty. Past performance does not constitute a guarantee of future results in any way. You are solely responsible for doing your own financial, legal, tax, or investment research before taking any actions.


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Mathieu Hardy
Chief Development Officer

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