Under The Hood - March 2021 - Crypto Autopilot
March was a very good month for the Crypto Autopilot and for Crypto too, but the Autopilot left everything in its wake. Dive in to find out more.
This is sent as an email to everyone on OSOM and published here for everyone to enjoy.
OSOM is the all-in-one Crypto Wealth Manager. With wallets, exchange, Crypto Roboadvisor, DeFi Earn to lend stablecoins in DeFi, and Crypto Strategie, it is all you need in a Crypto Asset Manager.
Our computers do the heavy lifting for you with a long-term perspective so you don't have to. From crypto on-and-off ramps to passive income and diversified portfolios, OSOM has you covered.
The guide to getting started is here.
In March we kept outgrowing the overall Crypto market by a lot! In Euro terms the Total Market Cap of Crypto increased by 31.70% while the Crypto Autopilot’s performance was 78.47% 🎆 We also totally beat Bitcoin’s monthly returns 📣
⁉️ This month you asked how the Autopilot works and we wrote a whole blog post about it. You also asked **why we don’t have positive returns every single day ** and we put it into a chart so it’s easier to understand. To answer your questions about the role that Crypto can play in an overall portfolio, we wrote 2 blog posts, here and there. As a bonus, we didn’t just look at past data but also ran a simulation to the end of 2021 📈 - to be understood as a hypothesis based on past data, we don’t have a crystal ball! Finally, you asked if we could give you more data for tax reporting, and we will!
The Autopilot holds, currently: BTC - 39.10%, THETA - 15.40%, ADA - 11.60%, HBAR - 6.60%, FTM - 5.50%, LUNA - 5.10%, FIL - 4.90%, XEM - 3.80%, DCR - 2.90%, MKR - 2.00%, WAVES - 1.80%, AAVE - 1.40%
March saw announcements of major changes to Ethereum (EIP 1559); lots of projects delivering or announcing cool stuff (🌖, 💫, 🦄 , 🍀, 💱 ) and raising lots of 💰. Also, the waves of companies buying or using crypto kept coming 🌊 - might it precede a tsunami?
We started testing our OSOM DeFi Earn product internally and will be inviting those who volunteered shortly.
💌 Spread the Word
⭐⭐⭐⭐⭐ If you enjoy using OSOM and the Crypto Autopilot, we would love for you to leave us a review on Trustpilot, the Google Play Store and/or the Apple App Store. Ratings and reviews help us get discovered and social proof is one of the most powerful components in making a purchase decision. By leaving a review, you will help us help others join the crypto community!
🤑 Is anyone you know not on the Crypto Autopilot yet? Help them get on board with our referral campaigns, we've got perks for everybody! If a friend signs up through your link, you'll receive 20€ from us after they make their first minimum deposit of 0.0082 BTC - or its Euro equivalent - into the Crypto Autopilot. Your friend will also receive 10€. That's a free performance boost.
🎁 Are you looking for a gift that keeps on giving? Are any birthdays coming up this month? Remember that you can gift Bitcoin or an Autopilot balance to your loved ones very easily. They will thank you all year long!
✔️ March Was a Very Good Month for Crypto and the Autopilot
1️. The Total Market Cap of Crypto grew only slightly slower than in February. It started the month at about € 1.2 Trillion and ended it at around € 1.5 Trillion. A 31.70% increase.
2️. Altcoins (meaning, everything except Bitcoin) contributed heavily to this growth as the Total Market Capitalization of Crypto Excluding Bitcoin grew by 40.53% in March. That’s also a little slower than the 42.53% growth of February but impressive nonetheless.
3. Bitcoin opened the month at €38,509.77 and closed it at €50,243.03, a 30.47% gain.
4️. The Crypto Autopilot Performance 🚀🚀
The ₿ - denominated performance for the month was 33.43%; meaning that our diversification strategy beat holding Bitcoin alone for the month. By a very significant margin. When it comes to the €-denominated performance, it was 78.47%.💰
Source: Since we started, on 26 September 2019, that’s a 1010.43% performance in Euros, 67.38% in BTC. Over the period, the Crypto Autopilot outperformed BTC 430 days, or 77.76% of the time, and outperformed Euros 491 days or 88.79% of the time
🚀 Did you notice how the Crypto Autopilot is leaving everything behind in March? At what risk does all that return come? We actually offer a pretty good risk/reward bargain.
✍️Interesting Crypto Autopilot Moves in March
On March 8, Solana (SOL) was added to the Autopilot’s addressable universe, shortly followed by PancakeSwap (CAKE) the following day. PancakeSwap is seeing a lot of traction because it is on the Binance Chain, and Ethereum transaction fees are too high right now. It’s also why a lot of blockchains and “layer 2” solutions that are competing with Ethereum on speed and fees are currently seeing a lot of traction.
Ten days later, on the 19, we added The Graph (GRT) as well as Fantom (FTM). They had been on our radar for a while but the concentrations by large holders were pretty high and almost everyone who held the token was “in the money” (= would make a profit if they sold) at the time when they were first considered for inclusion. Which would have been a risky position for you. Now it’s a little more equal so we added them to the investable universe. That same day we also added Polygon (MATIC) & UMA (UMA).
On the back of some good news from the SEC-XRP lawsuit, we added Ripple (XRP) back to the universe on March 22. Then on the 29, we added Chiliz (CHZ); it sounds silly but look at who they are cooperating with.
The Autopilot is allowed to take positions in any coins up to 40%. And right now it’s almost there with Bitcoin, with a 39.1% allocation. Not yet 40%, but close. It has been increasing steadily throughout the month which started with a 34.9% allocation that moved to 36.10% around the middle of March to end the month at 39.1%.
Interestingly, it’s not “altcoin season” for all altcoins. And the “traditional large-cap” crypto are not really enjoying a rally. That’s why we think Index Investing isn’t the best strategy for Crypto.
🙋 Your Questions on the Autopilot, Answered!
We love when you ask us questions. With them, we can build a better product and compile the answers for everyone to find! So thank you!
For those who recently joined us, in the past months we covered those questions: “How diversified is the Autopilot?”, “Why do I never see Ethereum in the list?”, “When is the best time to deposit?”, “Have you tweaked the algorithm recently?”, “What if you go Bankrupt?”. If you missed them, those answers are now all on our blog, just follow the links.
Here are the questions from this month:
1️. How Does the Crypto Autopilot Work?
We get that a lot and we will keep trying to answer it any way we can until we get it right! 😀 Let us know how we do this time:
“The Crypto Autopilot looks at several months of past price data to build a portfolio for the medium to long term (2.5 to 5 years) with the objective of achieving stable growth - which means avoiding drawdowns. It optimizes for a 4th generation risk measure - iVaR - which can roughly be described as the time it takes to recover any losses. It can choose from a list of assets we add to its investable universe”.
We also have an article that details those 3 points and explains why avoiding drawdowns is more interesting than looking for high returns on our blog (hint: it makes you more money in the end).
2️. How Long Should I Stay in the Autopilot?
We don’t tell you what you should do, but if you read the answer to the above question, you might have a sense already of what we built it for: the Autopilot works on a timeline of 2.5 to 5 years, and looks at the price data from several months ago to make its investment decisions. It does not care much about what happened last week or what happens next week. It does not look for short-term gains, it is not momentum-driven.
To help make things more understandable, based on our past data of running the Autopilot live with our model basket, we calculated the average, minimum, and maximum returns (%) when investing in the OSOM Crypto Autopilot between Sept 26, 2019, and March 23, 2021 (545 days in total), depending on the time horizon of the investment, excluding fees and in EUR.
What it shows is that those who held their investment for 300 consecutive days at any time in the 545 days would on average have made a return of +161.95%. Even when buying and exiting their investments at the very two worst points in time they would still have enjoyed a return of +6.21%. At the very best two days, they would have enjoyed returns of 660.49%.
On the other hand, those who stayed for 30 days would on average have made a return of +16.31%, but if they bought and exited at the very worst point they would have seen losses of -58.48%!
Over 2 days, the average gain is +1.04%, but it goes from minimum -44.03% to maximum +30.25%.
Someone who would have bought on day 1 (26 September 2019) and stayed in the Autopilot the whole time to 23 March 2021 would have seen 932% returns.
We see some of you withdraw after 2 days. And amongst the ones whom we saw withdraw and never come back to the Autopilot as of 25 March 2021, the biggest contingent ( 32% ) withdrew after 18.5 days, 45% withdrew under 37 days, and 72% under 93 days. 82.2% of those exiting before 18 days do so with a loss. (The good news is that an overwhelming majority of you do seem to get it and just stick with us 😃).
We can say unequivocally that using the Autopilot for 2 days is a gamble, and not what it was built for. We expand on the explanations in this blog post.
3️. Why Own Crypto and When Should I Buy it?
We do not give advice and you should consult your financial advisor to know what’s right for you. What we can do is give you some tools to think about the question, so you can have an informed discussion with your advisor. In that intellectual toolbox we have the following:
- Understand asset classes, assets, asset allocation and maybe take a goal-based approach to investing
- Then ask “why a crypto allocation” We wanted you to have that toolbox easily available all in one place so we wrote a guide with the basics here.
As to when to buy, as we said in January: Dollar-Cost-Averaging (DCA) is generally promoted as a smart way by anyone who has anything to say on the topic. We wanted to make more tangible “why” DCA is promoted by most and give you an idea of what it looks like with the Autopilot. So we explained what DCA is in more detail & simulated a retirement plan that includes crypto. With forecasting to the end of 2021! You’ll probably be interested to read that a 10% allocation in Crypto over 529 days would have increased returns by 40% over investing in a fund of stocks only!
4️. Can we get Better Reporting for Tax Purposes?
Yes! Towards the end of the year, we will make it possible for you to have your entire trading history in the Crypto Autopilot. That way, however the Autopilot is considered by your tax authorities (as delegated management, or as a bot, or as a fund of sorts), you will be able to meet your obligations.
We scheduled that for the end of the year because we want to concentrate on bringing you a better product now and there is no reason to rush it before taxes are due in 2022.
5️. What are the Holdings in the Autopilot Exactly?
Here is the situation as of April 1st, and as always you can find details on performance drivers and holdings in the “insights” panel in the app. 📊
There are currently 12 coins held, in an addressable universe of 54, while we track 206.
📅 Crypto News & Happenings in March
March was a fun month with a lot of stuff happening, both in terms of projects launching features, funding rounds, and adoption of Blockchain at large. Here are the highlights from our point of view:
1️. One of the most important - and controversial - changes to the Ethereum tokenomics is Ethereum Improvement Proposal (EIP) 1559. It has been decided that it should go live in July, but there is dissent forming, so maybe we will see a fork. As for Ethereum’s price, it’s pretty much been trading between € 1’250 and € 1’500 the whole month. This might be because, unlike Bitcoin, ETH has utility, and high prices (and network congestion) hurt that. If BTC is “Digital Gold” and “ETH” is “Digital Oil”, then increased prices make it less usable. A bit like when the barrel of crude oil goes to €140 the whole economy suffers and you don’t use your car as much.
2️. Projects kept delivering and raising. Here is an extract:
🌖 We are excited by the Anchor protocol on the Terra (LUNA) blockchain which was announced in July and was launched in March. After experiencing the congestion & fees on Ethereum, it’s fun to pay US$ 0.5 for a transaction.
💫 COSMOS ($ATOM) has announced the launch of the “Inter-Blockchain Communication”, further proving that it’s possible to take down silos, which is a good thing for everybody!
🦄 Uniswap (UNI), the amazing decentralized exchange is launching a v3. With a lot of improvements.
💱 Coinbase is about to IPO; and interestingly they listed, in the IPO papers, all the risks they see for the Crypto markets (their business). If you want to have a better idea of the risks you expose yourself to - in their opinion - when investing in Crypto, it’s worth a read.
💰 Funding rounds went a little crazy this month. Money was raised left and right for all sorts of projects, even from Michael Jordan and Serena Williams.
3️. Adoption of Crypto by companies continues: the Norwegian Aker ASA announced it will get some Bitcoin, the Chinese Meitu bought for US$ 40M worth of BTC and ETH, Microstrategy bought another US$ 10M Bitcoin, Square’s CFO made the case for adding Bitcoin to every CFO’s arsenal, Goldman Sachs 🐙 will offer Bitcoin to its clients, Paypal offers to checkout in Crypto, Soros Fund CIO see an inflection point, and Visa became an Ethereum side-chain.
4️. Also, lots of money keeps flowing around NFTs (Non-Fungible Tokens). And it caught the attention of the SNL staff. The video is visible and more context on NFTs can be gotten here if you’re still trying to wrap your head around what they are.
🌱 What Does April Have in Store for us?
We have started the internal testing of our OSOM DeFi Earn feature. It’s a little rough around the edges but it works! We will soon open to those who said they wanted to be part of the Beta testing before opening to everyone. “Yield we come!”
Also, we are shortly going to be publicly announcing that we are joining Blockchain For Europe 🤫 to help make the promises and achievement of the blockchain industry more widely known on the “old” continent. We’re very excited to be joining forces with the other members to help make a disruption an evolution.
And again, don’t forget, since the pandemic is still raging on if April has you looking for a unique socially-distanced gift, 🎁 you can gift Bitcoin or an Autopilot balance very easily. If you do not have anyone to make a gift to yet, you can always give us a gift by giving some feedback as we said in the intro to this post.
Feel free to let us know if you have any questions, ideas for how we can improve - or anything else - by contacting us at support at OSOM dot finance!
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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