Under The Hood - September 2021 - Crypto Autopilot

It was another rhythm for Crypto this month

With politicians and institutions back to work we saw crypto take on a whole new “societal” dimension. That’s good news, it means it’s relevant. No one talks about things that don’t matter.

On your side, it’s the start of the month, so it’s pay check time 💸, the best time to invest and pay yourself first. Did you know you can easily make monthly deposits into Crypto Autopilot and DeFi Earn directly from your bank account? #DCA 🐜 You can start from about 100€/month in the Autopilot and 30€/month in DeFi Earn. Coinbase is starting to offer to automatically convert your pay check to Crypto and while we can’t do it directly as you get it from your employer, you can definitely do recurring deposits very easily.

Also, the end of the year is fast approaching, so remember that you can easily gift Bitcoin or a Crypto Autopilot balance to your loved ones 🎁 💝 🧧. For the record, an Autopilot balance gift of 0.0025 BTC (50€) on December 25 2020 would, on 1 October 2021, be worth 0.0067BTC and 259€. So +166.71% in BTC and +417.53% in €*. How many gifts have you ever given that quadrupled in value? Go on, make a millennial happy.

For a quick glance at the month’s topics before you find more time in your weekend to read it thoroughly, here is an overview:

💨 TL;DR

  • This newsletter - which we repost as a blog post, is 1 year old 🎂. We started with 880 but there are now 81,356 people who get this newsletter monthly. 🙏
  • The Autopilot € performance for the month was -1.38%, and the ₿ performance 4.78%. This is in a market where the losses for the month were between -3 and -15% in €; depending on how you look at it.
  • The Autopilot holds: SOL: 23.8%; BTC: 20.4%; TFUEL: 12%; ADA: 11.3%; AXS: 9.5%; CELO: 8.8%; HBAR: 8%; NANO: 2.5%; WAVES: 2.1%; MATIC: 1.6%. SOL was the biggest contributor to the ₿ performance this month.
  • Surveying the crypto space, we summarize 1000 articles from leading publications in one picture; talk about politics and public institutions talking about crypto as well as the institutions and cultural institutions getting on board. We end with a look at the growing pains of Ethereum rivals and the necessary bridges being built between the 100 blockchains.
  • For next month, we look forward to seeing how Terra (Luna) does on Columbus 5 and to see if Q4 is going to be as good for Bitcoin as “everybody” says.
  • We also ask for your (daily, if you have time - but once would already be amazing) vote so we 👑 win the “Best Robo-Advisor” at the Benzinga Fintech Awards.

🔂 You and Us: Let’s Take Stock

🎂 Happy Birthday to this Newsletter! We ran an experiment in August 2020, to give you more transparency, by sending news about July and asking people if you liked it. 💯% of had said yes. So in September, we sent it “in production” and from October onwards also started putting them here. We have now covered a full year of Crypto Autopilot and Cryptosphere news and you can always go back in time by here. Thanks for your continuous feedback which has allowed us to get to where we are today; as you can see here, we’ve changed a little 😉

🤝there are now 81,356 people to get this monthly update. That’s up from 880 a year ago, a 9145% increase 🚀. And an average of 40% of people emailed read it every month 🙏. We are so very grateful to have your trust and to be able to go on this journey together with you.

💬 If you want more news throughout the month, or to have a chat with the team, find us on 🐦 Twitter, 👔 Linkedin, 🎞️ Youtube, and 🔖 Reddit.

Now, let’s get into it.

🔬Markets: politics move prices, fundamentals unchanged.

1️⃣ The Global Market Cap of Crypto was peachy and growing until September 7, when El Salvador officially adopted Bitcoin as legal tender. It might be a case of buy the rumour, sell the news, but what is sure is that it created a “flash crash” which resulted in a lot of liquidation (that’s when people who borrowed to gamble lose their collateral all at once and everything gets sold on the market, which usually further depresses prices for a while). Once the dust settled, the total market capitalization of Crypto stayed between € 1.9T and € 1.5T for the rest of the month, before closing 6.83% lower than where it started.


global crypto market cap value Sept 2021

The top 200 Crypto excluding stablecoins (INDEXNASDAQ: CMC200) recorded a 10.64% loss.

₿itcoin was all fine until Sept 7 when it wasn’t. From Sept 15 to 20 it recovered above its Sept 1 price but from the 20th to the end of the month it oscillated around €37,000, where it roughly closed the month. It ended with a loss of 5.58% compared to the beginning of September. For an asset this volatile, this is an uncommonly calm month.

El Salvador, the USA, China: it really was not about crypto fundamentals this month.

The flash crash of September 7 is hard to attribute to any one event. It could have been the results of whales selling made worse by liquidations. Maybe some people were afraid of the SEC vs Coinbase Lend staring contest (spoiler, Coinbase lost).

September 20 also saw a pretty steep decline, which could be attributed to the fears around Evergrande, what the PRC would do with the event, and how much of their commercial papers Tether might be holding. It was not just Crypto that day, it was “risk-off” everywhere, and that usually includes crypto. The good news is that when it comes back up, Crypto’s usually leading the charge.

As if that was not enough for a month, China announced (again) that crypto was kind of illegal on September 24. They’ve pretty much been doing it since 2017 and it mostly had, as an effect, to pump the price of decentralized exchange tokens. Capital controls have never really worked anywhere.

2️⃣The Total Market Cap of Crypto Excluding Bitcoin lost 3.46%, or 14.81% if we look at the Top 200 excluding Stablecoins and Bitcoin. (INDEXNASDAQ: CMC200EX). 😬

That’s not enough to undo the gains of August, but still, it kind of hurts. Amongst the largest relevant projects, there are actually only 21 that managed to have a positive performance over the past 30 days. They were mostly layer 1 and 2 chains, and AXS.

3️⃣OSOM Crypto Autopilot

Diversification paid off again this month. The ₿ performance for the Autopilot this September was 4.78%. The € performance was only -1.38%. This is in a market where the losses for the month were between -3 and -15% in €; depending on how you look at it.

That’s because, out of the 21 assets that had a positive fiat performance this month, the Crypto Autopilot was holding 3: SOLAXS, and HBAR.

Autopilot performance since 26 09 2019 -  that’s a 1085.87% performance in Euros, and 136.08% in BTC.
Since we started, on 26 September 2019, that’s a 1085.87% performance in Euros, and 136.08% in BTC.

Plainly, this means that, historically, the Crypto Autopilot beats holding Bitcoin or Euros over the long term. Check out “Time in the Autopilot And Returns” to see why time in the market is better than timing the market. And compared to Bitcoin, we even offer better risk-adjusted returns: you can still find our benchmarking exercise from September 2019 to June 2021 here.

🤿 Autopilot Deep-Dive

After this review in broad terms, let’s dive into the Crypto Autopilot’s behaviour this September.

💰 What are the holdings in the Autopilot Exactly?

As October came around, The Crypto Autopilot held on to the following 10 assets, out of a universe of 69, while the team now tracks 228 assets:

SOL: 23.8%; BTC: 20.4%; TFUEL: 12%; ADA: 11.3%; AXS: 9.5%; CELO: 8.8%; HBAR: 8%; NANO: 2.5%; WAVES: 2.1%; MATIC: 1.6%

SOL: 23.8%; BTC: 20.4%; TFUEL: 12%; ADA: 11.3%; AXS: 9.5%; CELO: 8.8%; HBAR: 8%; NANO: 2.5%; WAVES: 2.1%; MATIC: 1.6% 

✍️ Interesting Crypto Autopilot Moves in September

If you read us religiously (no hard feelings if you don’t), and have an eye for details, 👀 you will have noticed that those are the exact same 10 assets as last month. Nothing else made an appearance mid-month. Only the weights have changed. Also, the investable Universe stayed at 69 assets. Pretty stable.

When it comes to watching the dance between Bitcoin and Solana for the top spot in the AI’s heart 💞 , it was interesting to note that Bitcoin was still king of the Autopilot on September 8 but that on the 15th it had ceded its position to Solana. The Sept 7 flash crash is probably what made Sol look like a historically much stabler asset.

🏎️ What are the coins driving the performance?

As explained above, SOLAXS, and HBAR drove the € performance. When it comes to the ₿ performance, the same 3 assets plus CELO we have to thank for. Again, SOL contributed 3 times as much as the second one, CELO. It’s easy to understand why: it’s the largest position.

📅 Crypto News & Happenings in September - Month in Review

The rocket ship took a breather this month while the world took in the importance of the past months’ developments, new chains tried to cope with their newfound success, and while countries tried to figure out how to handle the space that crypto is increasingly taking everywhere. It was not as fun to watch or thrilling as August was, but it was definitely interesting.

When it comes to what we had foreseen for September, not all our expectations were met: Ethereum stayed in a range of €1000 instead of moving radically as we thought it would, but Terra(LUNA) did get upgraded to Columbus 5 and the interchain world is definitely taking shape.

1️⃣ There are soooooo many things happening in Crypto nowadays that we wanted to try something new this month (let us know if you like it by replying to this email). It’s a quantitative approach to taking it all in.

We took 1000 articles published in September by leading crypto publications, cleaned up the words a little, and created a word cloud. Can you see patterns?

1000 articles from September 2021 in a word cloud

Now let’s move on to a more structured approach to what we thought was interesting this month.

2️⃣ Cryptos, Politics, and Public Actors

There were a lot of “extraneous” events that impacted crypto this month. One thing we found surprising is the level with which we saw politicians and “public” actors talk about or inject themselves into the crypto narrative.

Elisabeth Warren - who had already coined the term “shadowy super coders” now seems to be advocating for a stablecoin ban. In the US we also saw a game of “chicken” between the SEC and Coinbase around Coinbase Lend, where Coinbase ultimately gave up as regulators refused to say the grounds on which they would sue.

El Salvador made BTC legal tender and an interesting analysis by a Citi’s analyst shows that crypto adoption is highest where property rights are low (relayed by Exponential View - you’ll need to subscribe to read it).

Internationally, former European Central Bank (ECB) member and current Bank for International Settlements (BIS) member, Benoît Coeuré said that Central Banks must ‘act now’ on crypto boom and that CBCDs are urgently needed. The question “to what extent will private money be allowed to exist” is becoming increasingly asked.

Interestingly, as we have for a while, the Basel Committee on banking supervision, also within the BIS, has stopped talking about “cryptocurrencies” and prefers the term “cryptoassets”. Interestingly, 2 out of their last 13 press releases - that’s all their press releases this year - talk about cryptoassets. It’s the same amount of attention that they have paid to the climate crisis, and twice as much as they have paid to cybersecurity.

Finally, as politicians and public institutions pay attention to crypto, so do crypto people pay attention to them. Lobby Lobsters NFT drop raised $4M to support DeFi lobbying efforts.

3️⃣ Institutions and Cultural Institutions Meet Crypto

The number of newcomers to crypto is astounding and we can’t follow everyone’s little journey, but focusing on institutions is a good way of getting a “temperature check” for crypto adoption. It’s a much better indicator than this or that day’s Market Capitalization because it’s inscribed in the “long” timeline and is less noisy.

The private equity firm and Alan Howard-Backed “10T Holdings” has raised $750M for debut crypto fund to pursue investments in fast-growing cryptocurrency companies. Billionaire hedge fund manager Alan Howard is among the fund’s biggest backers, along with public pensions including the Municipal Employees’ Retirement System of Michigan. Yup, your retirement funds get into crypto now.

EY, who’s been active in the blockchain space for a while, turned some heads as they announced that they are collaborating with Polygon. So did Google when it announced it would collaborate with the FLOW blockchain from Dapper Labs, the CryptoKitties inventors.

Continuing with the finance and mega-companies dabbling in crypto, we also saw Revolut pay for its offices in Dallas in BTC because sending money over the Atlantic is a pain (and we suppose they couldn’t be seen using the awesome Wise.com). Also, Angellist is adopting USDC for investors because, well, the US banking system is horrible. In addition, it looks like Visa is indeed intent on becoming a layer 2 of Ethereum. For real.

Lastly, it dropped this morning and this is crazy to write: Societe Generale is submitting a proposal to MakerDAO to include OFH tokens ("obligations de financement de l’habitat"; pardon my French) as collateral, leveraging an algorithmic stablecoin on-chain bank for refinancing. 🤯

On the cultural institution side, after Fortune had released its cover as an NFT previously, another cultural institution, The Economist, went all out this month with a cover dedicated to DeFi and a whole suite of podcast episodes, and articles about DeFi, Bitcoin, and crypto in general.

Keeping up with the written press (we had never thought we would write that in 2021), movie theater chain AMC is also getting in on the action. The CEO Adam Aron tweeted that in addition to Bitcoin (BTC), the chain will expand its crypto acceptance plans to include Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) for U.S. movie tickets and concessions ordered online by the end of the year.

And, as the man is clearly an institution in the US, we thought we’d put the news in this section: Tom Brady is reportedly open to earning part of his salary in Bitcoin, Ethereum, or Solana. It makes more sense than BCH to us, but to each his own.

4️⃣ Ethereum “Rivals” and Growing Pains.

Small fry can’t afford to pay for transactions on Ethereum anymore and it’s leading a lot of the other layer 1 and layer 2 chains to get attention. But with all the new attention comes growing pains.

On Sept 1, ICP had nodes reject traffic, on Sept 3, Terra’s TerraformLab node was DDoS’ed. At the beginning of the attack, the TFL node started to slow down and a few hours later the node was rejecting unauthorized requests on its LCD and FCD endpoints.

Then on Sept 14, Solana was down for hours because of resource exhaustion. It had to be turned off and on again. On the same day, Arbitrum went “down” as well.

Everyone has recovered, and all seems fine but everyone comes out of this with is: How can the community address such challenges? How can we build infrastructure that isn’t taken down by the launch of one NFT or one botnet? Because the metaverse won’t happen if one popular NFT can crash a blockchain.

5️⃣With new chains and new layers, liquidity, property, and information need to flow. That’s why we need bridges in a multi-chain future.

The multi-chain future seems inescapable at this point. There are just too many advantages to building some use cases on specific chains for it not to happen, at least in the short term. There are over 100 active public blockchains today. And like countries need trade routes for labour and capital to flow, blockchains need bridges. From this article - which has some good in-depth research - we already count 40 bridges.

This is how Do Kwon, of Terra (Luna) which has just undergone a huge upgrade to connect to as many chains as possible, puts it:

maybe it's a bad idea to stick all the applications into one global computer. Maybe it just makes sense to have a multi-chain future. @stabelkwon @terra_money at Messari Conference

6️⃣ Finally, some info about OSOM

👑 You can still vote for us (daily!) for the Benzinga Awards in the “Best Robo-Advisor” category. We would love your vote and support!

📖 Mathieu was interviewed for Authority Magazine about “5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency”. His first point is that we should stop calling them Cryptocurrency.

We also appeared in Global Finance Magazine to explain to CFOs what DeFi can do for them and were featured in Yahoo Finance.

ℹ️ We keep developing insights.osom.finance where you can now simulate your own strategies and find a whole lot of things to learn. Give it a try and let us know if you like it or if you have ideas for what to put there next.

🕶️ Did you notice our “dark theme” in the app and on the web?

🎃 What Does October Have in Store for us?

1️⃣ The Espresso Hard Fork progress on Celo. It’s Algo stablecoins again. A tentative timeline has been discussed on the Celo forums for the upcoming Espresso Hard Fork. The goal of the Espresso hard fork is to maintain Ethereum compatibility. Activation should be for January 2022, but for that to happen, they need to make progress now.

2️⃣Terra (Luna) is expecting a stampede. The USD stablecoin held the peg very well during the Sept 7 flash-crash, which should boost confidence, and the recent upgrade opens the possibility for their algorithmic stablecoins to flood all blockchains and will allow tens of protocols that were waiting to launch to finally do so.

3️⃣The internet is abuzz with how good a quarter this one should be for the price of Bitcoin because the patterns are reminiscent of some previous bull runs. It would feel weird if history was that predictable, and the world we live in now is not that of 2018, but 🤷.

Short-term the markets are unknowable (and a Hamster is as likely at guessing right as we are), but we are confident in the long-term behaviour of the Autopilot, and therefore quite confident as we enter Q4 with a sizeable BTC position and a good mix of Layer 1 and Layer 2 chains.

🤝 A couple things before the end

🏛️ We talked about DAO’s last month. BanklessHQ has a guide on joining one if you want to try to be part of an “internet community with a shared cap table and bank account.” (Cooper Turley).

🕒 Saying it again in case you skipped the intro because we get asked if it’s possible all the time: do you want to regularly deposit in Autopilot or DeFi earn? Just make your bank transfer recurrent in your banking app. If you are encountering any problems, let us know.

🎁Have you ever offered a gift that multiplies itself over time🐟? Read the intro to this post to see how you can.

If you have a business ⚖️ and would you like your business to invest in Crypto and/or make or receive Crypto Payments, we now accept companies as customers, so just go to app.osom.finance, click “create account” and make sure to tick the box ☑️ Business account under the “password” field. For questions, just reply to this email.

🤖🍏 If you don’t like using our kick-ass progressive Web-App, we have Android and iOS apps. Of course, we do! They’re here for Android and here for Apple.

That’s all, folks! 👋 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!

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(a) 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. (b) Past performance is no guarantee of future results. (c) Be sure to check the list of countries we accept before signing up and sending us your assets.

*before fees. And past performance is no guarantee of future returns