Under the Hood - July 2022 - Crypto Autopilot
We were wrong last month: price-wise, it was really fun.
The Fed raised the rates but it seemed to have been 100% priced in, and the earning calls were actually not that bad. The result is that most markets are up, crypto included. As far as crypto goes, the upcoming ETH merge likely had a role in the kickstarting of the new up-trend. Does that mean it’s “up-only” from here? Probably not, but it might be a signal that the absolute bottom is behind us.
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The OSOM Crypto Autopilot € performance was +21.45% while the ₿ performance was +0.99%-
The OSOM Crypto Autopilot holds: BNB: 30.4%; XLM: 21.4%; MKR: 18.2%; XRP: 15%; BTC: 10.8%; LTC: 2.3%; KLAY: 1.1%; CHZ: 0.8%
This month we have a lot of new content for you: our long dissertation on why we are super bullish (with examples of crypto being used and good videos, podcasts, and articles for your consumption), an update of "Time in the Autopilot and Returns", and an update of the chart that shows how good we are at beating the market.
In the news, we look at MakerDAO entering the "Real World", what Crypto Phones and ZK Rollups mean for adoption, and we track "the Merge" 🐼.
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.
We only send an email once a month but we do a podcast a little more frequently, so maybe you'll learn something fun.
🔬Markets: Was this the bottom?
1/ The Global Market Capitalisation of Crypto has recovered this month. It’s back over €1 Trillion after a 31.49% rise over the month.
Bitcoin did not lead the charge but did recover some of its value, gaining 21.05% to close at €22’855.74
2/ If we exclude Bitcoin from our calculations and focus on the market capitalization excluding BTC, then the numbers look even better, with a 33.22% gain. If we look at the Top200 crypto assets without Bitcoin and stablecoins, the gains are even 43.64%.
3️/ The OSOM Crypto Autopilot surfed the rising tides. This month the € performance was 21.45% while the Bitcoin performance was 0.99%
Large scale & interactive chart available here. Since 26 September 2019, that's a 467.43% performance in € and 87.30% in BTC. That's 84.01% and 24.66% annualized, respectively.
🐂 As the prices of crypto were going down with everything else against the dollar over the past couple of months, we got asked repeatedly if we thought that was the end. So let us be clear: we think it's the beginning.
Even more so than Web 1 and 2, we think that the total addressable market of Web3 is "the world". Because now that the problem of having "scarcity" and "value" on the internet is solved, the sky's the limit. And just to make it very very clear why we think that way, we wrote about 4000 words on the topic, made a list of why it's not wishful thinking, and made a list of good articles and videos that we think are worth looking into if you want to know more about the topic.
🤿 Autopilot Deep-Dive
Before going into some of the details of the month, let's focus on the long term.
⌛💸 We have updated the article on "Time in the Autopilot and returns". The last update was from a year ago and after 7 months of downtrend, we felt like an update was warranted. You will find the details here. The bottom line is that Those who held their balance for 600 days would on average have made a return of 744.06% and even when buying and exiting the Autopilot at the very worst two days 600 days apart, they would still have enjoyed a return of 189.23%. Over 600 days, no one saw a loss (but remember that past performance is no guarantee of future performance).
🚀🧑🚀 We have also re-ran our Autopilot Benchmark. A year ago we really beat the competition, but how do you think we are doing now? Even better. This is the performance comparison over time, this is how much better the returns are (veeery close to twice the BITW10), and this is the Alpha.
💰 What are the holdings in the Autopilot Exactly?
BNB: 30.4%; XLM: 21.4%; MKR: 18.2%; XRP: 15%; BTC: 10.8%; LTC: 2.3%; KLAY: 1.1%; CHZ: 0.8%
🏎️ What are the coins driving the performance?
The Autopilot held pretty much the same basket throughout the month. BNB contributed most positively to the BTC performance, with MKR helping behind. XRP and XLM pulled the portfolio performance in the other direction this month.
📅 Crypto News & Happenings in July - Month in Review
1 MakerDAO, the "on-chain bank", is going to issue DAI - the dollar-pegged overcollateralized stablecoin - against "Real World Assets" from Huntingdon Valley Bank and Société Générale Forge. So, HVBank is going to sell mortgages in exchange for DAI. This is an interesting step in tying together meatspace and Web3.
And an interesting way for MakerDAO to increase the supply of DAI as stablecoins are in high demand as many countries face extremely high inflation, as reported in Argentina.
2 Would you like a crypto-phone? As the industry matures, it's moving on to solving more and more "User Experience" (UX) problems. And one of the biggest problems is that we all spend most of our screen time on our phones but most of Web3 only works well on Desktops. There are no good technical reasons for this, and it's mostly an engineering problem. The good news is that our phones already have all the bits required to make them great crypto wallets. It's just that no one go to it yet. But that's changing.
Native phone integration of crypto would be a game-changer for the increased adoption of Web3. Especially if coupled with our next point.
3 We're about to be able to really use EVM equivalent ZK rollups (if you don't know what that means, this should help). Zero-Knowledge (ZK) Ethereum Virtual Machine (EVM) compatible rollups mean that Ethereum decentralized apps will be deployed on rollups. Rollups "batch" transactions to make them a lot cheaper. So interacting with Uniswap could cost half a cent instead of $5.
Also, ZK rollups are fast and they enable "account abstraction" (AA). This last part, AA, is important because it means that it is possible to create accounts without seed phrases or other secrets. Because most people don't want to trust their net worth to the fact that they will be able to remember and secure 12 words
As it all comes online, that means: Very fast, very cheap, very easy, very safe Web3. And if the people from the "crypto phone" section did a good job, we can add "very mobile" to the list. Who's not going to want to use that?
Zero-Knowledge (ZK) tech also makes it easier to add privacy to blockchains. The railgun.org & aztec rollup teams are working on that. So get ready for radically different experiences.
4 And it's important to have a better experience because you can do so much more on Web3 than you could a year ago. Lenstube was just launched on https://lens.xyz/ for example. And all the videos are stored in the decentralized Arweave.
5️ Ethereum merge 🐼 tracking: there seems to be a soft commitment for September 19. There is one more dress rehearsal in early August (somewhere between the 6th and 12th, probably), and if all goes well then the merge will be firmly scheduled. The anticipation of this event is likely why ETH performed much better than Bitcoin this month. And as ETH's monetary policy completely changes with the merge, it's not entirely impossible to see it flip Bitcoin as the largest crypto asset.
This time we won't speculate about what's to come, which will hopefully give you more time to read all the very interesting material we link to in this missive.
🤝 A couple things before we part
It's all over our socials 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, there's no cap on how much you can make! You can choose between a fixed referral bonus or to share in our revenues from the people you refer 🤑!
If after reading all this you are as convinced as we are that a lot of assets are underpriced right now and you find that you want to dollar-cost average your way into a portfolio with some crypto remember that you can start from about 100€/month in the Autopilot and 30€/month in DeFi Earn. You can easily make monthly deposits into Crypto Autopilot and DeFi Earn directly from your bank account - #DCA 🐜.
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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The Autopilot is for medium to long-term portfolios, which means 2.5 to 5 years. See the chart for an at-a-glance understanding of how time increases your chances for positive returns.