Under the Hood - September 2022 - Crypto Autopilot
This month was fairly calm, all things considered.
Let’s 🤞 it’s not the calm before the storm. Q3 is over, welcome to fall and that time of the month when look back at what happened in Crypto & the OSOM Crypto Autopilot.
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- The OSOM Crypto Autopilot € performance was +12.68% while the Bitcoin performance was +13.57% in a market that generally lost value. So the little robot is doing good!
- The OSOM Crypto Autopilot holds: BNB: 30.6%; XRP: 29.2%; BTC: 14.4%; MKR: 10.0%; CHZ: 8.2%; LTC: 4.2%; EOS: 3.1%; CAKE: 0.4%
- We only talk about good news, as we are pretty sure you get a regular supply of all the others: The Ethereum merge, the new ATOM and LINK tokenomics, and how good Polygon is at BD.
Do you wish you could use OSOM but can’t from where you are? We have a solution for you! The world's best diversified crypto portfolio to execute yourself is available on Substack
🔬Markets: it’s 🦀, 🐻, 🐼…and a 🚀
➊ The Global Market Capitalisation of Crypto has been moving roughly between € 900 Billion and € 1 Trillion for most of the month. It lost 2.6% over the month which, for crypto, we can call "flat". There was a clear little "bump" before the Ethereum merge 🐼 but that didn't last. However enthusiastic the Ethereum community was about moving to Proof-of-Stake, that clearly did not translate into a massive allocation of capital into ETH.
Crab traders and bears seem to be firmly in charge. The pandas didn't lead the bulls as some had initially hoped. But since no one seems to be understanding how the economy's moving, the timidity is quite understandable. A lot of investors, right now, favor the US dollars above all else.
Bitcoin fared ok in this market, losing only 0.78% of its value over the month. Knowing that the S&P500 lost 8.25% over the same time period, one could argue that Bitcoin actually did amazingly well.
➋ If we exclude Bitcoin from our calculations and focus on the market capitalization excluding BTC, it's down 3.05% over the month, clearly indicating that Bitcoin acted as a support to the overall market. And indeed, the Top200 cryptos excluding stablecoins lost 6.47% this month, but the Top200 excluding stablecoins and Bitcoin lost 11.72%!
➌🚀 The OSOM Crypto Autopilot is finding gems and ripping against the trend. This month the € performance was +12.68% while the Bitcoin performance was +13.57%
Since 26 September 2019, that’s a +482.78% performance in € and 121.84% in BTC. That’s 79.48% and 30.26% annualized, respectively.
🤿 Autopilot Deep-Dive
The Autopilot had an excellent month, performance-wise, but also an eventful one when it comes to the Universe of assets it can trade with.
Over the month, 3 assets were removed from the “investable universe”: DigiByte (DGB), UMA (UMA), and Sushiswap (SUSHI). They haven’t done anything wrong and we still like them on all of their “qualitative” aspects, but they no longer satisfy the market capitalisation and trading volumes requirements, so they had to be removed.
This means that we now have 65 investable assets left in the universe.
💰 What are the holdings in the Autopilot Exactly?
BNB: 30.6%; XRP: 29.2%; BTC: 14.4%; MKR: 10.0%; CHZ: 8.2%; LTC: 4.2%; EOS: 3.1%; CAKE: 0.4%
🏎️ What are the coins driving the performance?
This month, the Bitcoin performance was firmly driven by XRP. BNB, CHZ, and LTC helped, but not nearly as much as XRP did.
CHZ (and Socios.com) are really one to watch ahead of the World Cup with the explosion of fan tokens.
MKR and EOS actually held the portfolio back a little. But not nearly enough to make a dent in this month's amazing performance.
📅 Crypto News & Happenings in September - Month in Review
➊ "The" news this month was the "Ethereum Merge". It had been in the works for years and it consisted of changing the consensus from "Proof-of-Work" (PoW) to "Proof-of-Stake" (PoS). The latter has, as an advantage over the former, to consume a lot less electricity and not need to rely on specific hardware.
PoW is what Bitcoin pretty much invented and uses.
Ethereum had launched with PoW but the stated ambition of moving to PoS as soon as possible. But it turned out to be very difficult and took a very long time.
Grossly simplified, this month they finally "merged" the "test" chain they'd been running on PoS for a year with the "production" chain everybody was using (a more precise description is in this video on the merge). And it went without a glitch, which is an amazing feat of engineering.
Outside of the reduction in energy consumption and hardware waste, there are also interesting elements for the economics of ETH as an asset and currency:
Now that you need to "lock up" Ethereum to be a "validator" (and do the job miners basically did before), a lot of ETH is temporarily removed from circulation. So it can't be sold.
Since it's cheaper to run a validator than a miner, you don't need to pay people as much to do it, so the issuance of new ETH to pay for security is reduced, so there is less "new ETH" on the market every year.
This all leads to less ETH being made available on the market.
At the same time, Ethereum is still the most "premium" blockchain on the market, raking in an average of US$ 2M a day over the past 7 days selling blockspace. That's 4X more than its first competitor, BSC, selling half a million $ worth of blockspace a day.
The conclusion is that the access token to the ecosystem's (currently) most valuable real estate (the Ethereum blockspace) just became scarcer. With DeFi still going strong, GameFi getting refined, and Layer 2's getting ready to unleash a massive amount of creativity and usage, Econ101 tells us that the price of ETH should "do something".
➋ ATOM, the token of the ever-interesting Cosmos ecosystem, has also reviewed its tokenomics and a new whitepaper, Cosmos 2.0, was announced at the end of the month. Everyone had high praises for it.
We're still reading through the 27 pages and making up our minds but we'll give you a summary next month.
Chainlink (LINK) also had a conference where they announced a revamping of their tokenomics.
It looks like all the major ecosystems have learned a lot over the past 5 years and everyone is back to the drawing board to incorporate the new ideas. It's amazing to see how, as everyone is building in the open, everyone gets to learn from each other. That makes innovation happen much faster than in silos.
All of this bodes well for the future.
➌ Blockspace is selling like hot cakes at Polygon. We checked in on the least-decentralized and most efficient Business Development team in crypto this month, and thigh is what we found:
That's a couple million people on-boarded in Web3 in a month. Kudos - and thank yous - to the team at Polygon.
🤝 A couple things before we part
Still fresh!! 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!
Did you notice that we removed the "what does next month have in store for us" from the monthly update? It turns out that things move so fast that we were usually not adding a lot of value by looking forward. If you like it and would like it back, let us know through the usual channels.
💸 🎁 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. Daily, weekly, or monthly, it's always up to you!
We had to turn off DeFi Earn this month. If you had a balance but haven't yet noticed, you should have received an email and all of your balance should be available in € on your account.
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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