Under The Hood - August 2021 - Crypto Autopilot
Chief Development Officer
The first three days of the month were a bit indecisive, but then it went explosive!
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Sometimes August feels dull and sleepy with so many in the northern hemisphere taking time off. Not so for this one in Crypto. We don’t even know what to call it at this point: NFT summer? Ethereum-Killer summer? Layer 2 summer?
Did you find a good moniker? We are curious how you saw it. Let us know on Twitter with #AugustMoniker.
Whatever you end up calling it, we are sure none of you were disappointed to see this renewed enthusiasm after the cold shower of mid-May.
So, let us settle in and look at what happened in Crypto and the Crypto Autopilot this month and see how that might shape what happens in September. For a quick glance at the month’s topics before you find more time in your day to read it thoroughly, here is an overview:
The Autopilot € performance for the month was 57.15%, and the ₿ performance 36.58%. That's in a situation where the top 200 projects (excluding stablecoins) grew, in Euros, by 27.19%, or 43.40% if we look at the top 200 ex-stablecoins and ex-Bitcoin.
At the start of September, the Autopilot holds BTC: 27.4%; SOL: 17.2%; TFUEL: 13.5%; ADA: 13.3%; AXS: 8.1%; CELO: 8%; HBAR: 5.3%; NANO: 3.2%; WAVES: 2.2%; MATIC: 1.8% . So 10 of the 69 cryptos the AI can choose from. SOL was the biggest contributor to the ₿ performance this month.
We got no new questions from you so we arranged the list of old ones in one place and took some time to write why lending in DeFi is better with us (spoiler: it's cheaper and will save you tons of time!).
The news we bring to your attention is about institutional adoption, mainstream adoption, the decade of the DAO, and some news about us. Because we did get 2 👑 wins so we wanted you to know! Also some NFTs we bought.
For September, we look forward to Columbus 5 for DeFi's second-biggest ecosystem, talking a little about the ETH price action, and the promises of interconnected blockchains.
Before we part, we give you Christmas shopping ideas and remind you that your business can get an OSOM account to manage treasury intelligently.
💌 Spread the Word, and have a chat 💬
❤️ If you share the love somewhere, make sure to include your referral link for some 💸 passive income 😉
Now, let's get into it.
🔬Markets: well, that was fun. It’s all in the green 🟢!
1️⃣ The Global Market Capitalisation of Crypto quickly grew from the 1.35T€ where it was at the end of July to about 1.8T€ mid-month and then moved somewhat horizontally until the end. It recorded a 29.14% gain over the month.
The top 200 Crypto excluding stablecoins (INDEXNASDAQ: CMC200) grew by 27.19%.
Bitcoin took it (a bit) easier this month and, after spending about half of the month around 40.000€ and even flirting with 43.000€, settled at 39.981,79€. That's a 13.98% gain.
Same as for July, and as indicated by our troubles for finding a moniker for this summer, this was the result of different trends colliding: The Ethereum London hard fork went well, ETH was burned as planned, and the "🦇🔉" (ultra-sound money) meme was only reinforced, Cardano adding smart contracts got it to 3rd place by market cap, NFTs on SOLANA proved interesting, Coinbase committed to #DCA its treasury into crypto, VISA bought a Cryptopunk, and Budweiser (AB/Inbev) bought an ENS domain name and an NFT for its profile picture. And that's just a sample. You would actually be hard-pressed to find any reasons not to be enthusiastic.
2️⃣ The Total Market Cap of Crypto Excluding Bitcoin grew by 36.91%, or 43.40% if we look at the Top 200 excluding Stablecoins and Bitcoin. (INDEXNASDAQ: CMC200EX). An interesting leap forward!
Top projects with most winds in their sails this month were so-called Ethereum-killers that sometimes resemble Ethereum Layer 2's of sorts with their EVM compatibility or the bridges they are building (SOLANA (SOL), Cosmos (ATOM), Polkadot (DOT), Tezos (XTZ), Cardano (ADA), Fantom (FTM), Near (NEAR) ), DeFi focused projects ( Terra (LUNA), Avalanche (AVAX), Serum (SRM), Celo (CELO) ), and, unsurprisingly, NFTs ( Rarible (RARI)). Axie Infinity (AXS), which had been the "gaming" surprise of last month, did quite well again too, as did the whole "gaming" category.
Ethereum (ETH) itself had a good month, with about 35% gains. A - maybe - surprisingly average performance in light of the London hard fork, but the average is a good one this month.
3️⃣OSOM Crypto Autopilot
Bitcoin cooled off while everything else heated up, and that's when diversification pays off: the ₿ performance for the Autopilot this August was 36.58%. The € performance was a whopping 57.15%.
Source: Since we started, on 26 September 2019, that’s a 1111.78% performance in Euros, and 125.31% in BTC.
To put it plainly, this means that historically, the Crypto Autopilot beats holding Bitcoin or Euros over the long term - at this point, you would even have more than doubled your BTC stash, and more than 10x'ed your Euro stash (if there is such a thing). You can check out "Time in the Autopilot And Returns" if you need a reminder of why time in the market is better than timing the market if your day job isn't at a Hedge Fund.
And this still holds true: compared to Bitcoin, we even offer better risk-adjusted returns. And for more benchmarking, you can still find our benchmarking exercise from September 2019 to June 2021 here..
🤿 Autopilot Deep-Dive
After this review of the market at large, let’s dive into the Crypto Autopilot’s behavior over the past month.
💰 What are the holdings in the Autopilot Exactly?
As we moved into September, the Crypto Autopilot was holding those 10 Cryptos, in an addressable universe of 69.
✍️ Interesting Crypto Autopilot Moves in August
The addressable universe grew this month to 69 Cryptos. We added Axie Infinity (AXS), Flow (FLOW), Stacks (STX), and Celo (CELO). You can see that the Crypto Autopilot wasted no time as it already holds positions in 2 of the 4 newly whitelisted tokens (AXS and CELO).
It has been interesting to see how the AI's heart kept going from BTC to SOL this month, as the two assets have traded places as the largest position in the ideal portfolio for most of the month. BTC always stayed at about 25-27% of the portfolio, but Solana (SOL) oscillated between 19% and 28%.
The rest of the tickers were broadly the same throughout the month except for Terra(LUNA) making a brief appearance before being turned away. Not for lack of performance - it's up about 300% - but likely because the price movements were very correlated to Solana (SOL)'s and the A.I. was trying to diversify.
🏎️ What are the coins driving the performance?
For August the performance in Bitcoin terms was mostly driven by Solana (SOL), Cardano (ADA), and Waves (WAVES). Everything else was there mostly as a supporting act. The Solana (SOL) position contributed about 3 times more than the next contributor, Cardano (ADA).
You can always find our recent performance against Bitcoin on OSOM.Finance and in these monthly updates in the section on Autopilot. But we don't run an industry-wide benchmark monthly, because it's time-consuming and is not pertinent month-by-month. Since it was the summer and some of you might have taken some time off to look at something else than your crypto portfolio (good on you, that's one of the best ways of not making a mistake if there is really no good reason to look at it), we wanted to highlight that we did run an industry-wide benchmark in June and that you can find it on our blog.
The TL;DR - from everyone we showed it to - is this: from what we can tell, the Crypto Autopilot is the smartest way to invest in Crypto 🎯.
🙋 Your Questions on the Autopilot, Answered!
We'll never say it enough: we love your questions. That's the best way for us to know what needs more explaining. Over the summer, though, we barely got any. So we compiled them all in a long list of "Not so Frequently Asked Questions", which covers everything you've always wanted to know and weren't afraid to ask.
It covers questions on the Autopilot, DeFi Earn, and the OSOM Team. Take a look!
The one thing - which is not Autopilot related - that you have been asking is "DeFi Earn What Please?"
So while we work on reworking our homepage and crafting a beautiful standalone page to better explain DeFi Earn, we wrote a small piece explaining why it might fit into your fixed-income strategy better than venturing into DeFi all by yourself (spoiler: it's cheaper!). With its current annualized performance of 7.30% in USD, we're pretty sure it beats your savings account. It's not the same risk profile as a savings account, but it's not quite prone to 80% drawdowns either.
And if you have any more questions, please send them our way by replying sending an email to firstname.lastname@example.org.
📅 Crypto News & Happenings in August - Month in Review
Apparently, the relatively calm month of July was put to good use by most market participants to refuel the rocket ship🚀. Because August was fun to watch!
It also went pretty much how we expected it to go based on our July update: Ethereum’s London hard fork went well and is burning ETH as planned, and Terra(Luna) did go from about 9€ to 28€ undoubtedly helped by the fact that Anchor added bETH as accepted collateral. We’re still wondering when Polkadot (DOT) is going to hold its parachains auctions, though.
Besides all that and the crazy price action which we talked about earlier, here is what we thought you should know:
1️⃣ From the desk of “institutional adoption” there is good news. It’s interesting watching institutions because they hold most of the money in the world so, even if they move a small portion of it to Crypto it makes waves. Solana (SOL), Cardano (ADA), and Ethereum (ETH) seem to have seen quite some inflows from institutions. US$ 24M to be exact. And while Yahoo talks about outflows for Bitcoin (BTC), IntoTheBlock’s on-chain analysis seems to suggest that there is an institutional accumulation of Bitcoin. Maybe those institutions finally realized a way to own it outright as opposed to going through various ETPs and trusts. IntoTheBlock does point to the fact that some are buying Coinbase or MicroStrategy to get exposure to Bitcoin, though, so we’re not 100% there either.
It has also been reported that 55 of the world's top banks have invested in blockchain and crypto companies. That's not quite like "participating in Crypto Networks", but banks don't move very fast, so it's always a good sign to see them move at all. In time, we have no doubt they will get there.
Lastly, Deloitte, while undoubtedly looking to sell more consulting services by scaring executives, released the results of an interesting survey of finance professionals who seem to think blockchain has a lot of potential in their business and even that Crypto will rival or replace fiat within 10 years. We don't doubt it but it's nice to get some external validation. They did say that their old tech, cybersecurity, and regulations were the biggest obstacles; but that's less of news.
2️⃣ From the desk of "mainstream adoption" there is also good news. And that's good news, because what's the point of reinventing finance, art, gaming, and everything in between for everyone if no one comes to use it?
On the one hand, we have the new projects: the number of projects that keep launching with new teams (not Crypto veterans) is staggering. Just take the example of projects on Terra(LUNA), because Smartstake does a good job of curating them. And sometimes it's pretty obscure stuff, but sometimes it's just about making DeFi available (a bit like us, yes). If we take all the projects on BSC, ETH, Kasuma, and Solana too it's mind-blowing.
And all those smart developers coming to crypto means more chances for success for the ecosystem as a whole.
On the other hand, we have the ecosystem just flat out launching adoption or expansion initiatives. Celo, Aave, Curve, and Sushi launched a US$ 100M initiative. Circle, thankfully, unhappy with having become a tokenized-USD behemoth with USDC is now going global, and we so very much hope that we're gonna get a good and widely adopted Euro stablecoin. Because we don't care who does it or what form it takes, we all need one. We need one "euro thing" that brings Euros on-chain. Once it's on-chain, we can swap it, flip it, wrap it, stake it, synthesize it or do anything else with it; but as long as fiat is Euro and crypto is "not-euro" denominated, it makes adoption harder in Europe.
Also, when Coinbase said it was going to buy a whole lot of Crypto, not to be outdone, Kraken and a bunch of DeFi companies said they would donate US$ 1.5M to support the development of ETH 2.0; which should definitely drive adoption as it does away with 100€ transaction fees (🙏). Looks like someone heard Vitalik's argument that more r&d spending is needed.
And lastly, we can look at the numbers of new and active addresses, and it's generally good news all around. And seeing things like VISA or Budweiser buying NFTs shows that crypto-savvy people are everywhere and that now that they've done it, others will follow.
3️⃣ It looks like the 2020s could be the "decade of the DAO" (Decentralized Autonomous Organisation) according to MoneyWeek. It's still early in the decade, so you might want to get acquainted with your next non-employer "boss".
This month saw more analysis on how DAOs are reshaping investments, DAOs creating financial products), DAOs for driving L2 development, and DAOs offering services for DAOs. We can basically rework the old meme, because, yes, "There's a DAO for that".
And the tone we take in describing this absolutely massive social evolution is light, but the implications and financial firepower are real. Today, the 20 largest DAOs hold over US$ 6B worth of digital assets. The biggest DAOs include DeFi projects as Compound, Uniswap, Bankless, and public-funding entities such as Gitcoin.
4️⃣ On our side, August has been interesting too 🐝
👑 We won "Best Crypto Investment Enabler 2021 - Europe" in the FinTech Awards 2021!
👑 We were nominated for the Benzinga Awards in the "Best Robo-Advisor" category. We would love your vote and support!
We're super happy to have been recognized as the best way to get into crypto. Make sure to let everyone know by sharing the good news with your referral code! 💸
📺 We also had the chance to speak at the Benzinga Crypto Festival and explain how we see things.
📖 We had interesting guest posts about Shiba Inu and Dollar and Bitcoin, and one post of ours explaining what's wrong with wanting all crypto to be fully traceable.
💶 We spent some fiat on some useful NFTs: the osom.crypto, osomfinance.crypto, and polybius.crypto domains. They aren't yet operational but they are ours. We also got a cool YAT for OSOM: y.at/🤯🤖💰
Do you have an unstoppable domain or a y.at?
ℹ️ Lastly, we've also been hard at work on insights.osom.finance where you can now simulate your own strategies. Give it a try and let us know if you like it.
🍃 What Does September Have in Store for us?
1️⃣ It looks like there is something weird in Ethereum-country: it's the most adopted blockchain and its price barely budged this month. But some are taking options on ETH at 50K in March 2022. So, one way or another, we think we're due to see something happening to Ethereum's price.
And while we don't place much faith in reading charts (so-called "technical analysis"), the obscure art of on-chain analytics is always a fun read, and some seem to believe we are about to see new highs. If you can afford them now, you might want to do your transactions on Ethereum before they become so expensive you can't afford them. And share that referral link of yours to friends who might thank you later 😅
2️⃣ Terra(LUNA) - the second "DeFi" token by Market cap - is going to be upgraded to Columbus 5. It was initially slated for Sept 9 but got delayed by a bit. That is going to change the tokenomics and open the bridge to the wider Cosmos ecosystem. Expect to see UST to a blockchain near you soon.
3️⃣ Talking about IBC, the general activity around the bridges, wormholes, wrapping, porting to layer 2,...etc has been insane. And we expect it to continue. That might be one of the reasons why we don't see more price action around ETH because with the walls being torn down from around the little ecosystem silos, liquidity and assets now flow more freely across chains. And the fact that a chain doesn't have all the "tooling" that ETH has yet is less of a problem as that ecosystem can initially concentrate on what's unique to it and pull in resources from other chains. That's a potentially beautiful world - with even faster innovation. But keeping track of what can and can't flow where is going to be a full-time job. We'll be happy to oblige, of course, but you'll still have to do some reading.
And, as is customary for us to end this section: We don't know where the markets will go, or what the Crypto Autopilot will pick next, and that's the whole point. What we know is that we are easing into the end of Q3 with a well-diversified portfolio big on Layer 1 competitors and holding a good portion of BTC which proved to be a solid foundation. And our historical performance and recent benchmarking exercise, while being no guarantee for the future, leave us pretty confident about the future.
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.
Chief Development Officer
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