Key takeaways
- Pulse: ETH-BTC Hourly (+51,00%), Wise: ETH-BTC (+35.89%), and Wise: MATIC (+34.41%) are the top three performing strategies in July.
- US CPI inflation was greater than projected in July and crypto market conditions were unusually harsh, with several crypto giants collapsing. Nevertheless, these three bots outperformed the market by more than 34%.
Market Recap: July 2022
On July 13th, the U.S. Department of Labor announced that the latest June price index (CPI) had increased by 9.1% year-on-year. This is the highest increase since 1981, far exceeding the market expectation of 8.8%. The producer price index (PPL) also opened at 11.3%, again much higher than market expectations. Moreover, concerns over the liquidation of the lending platform Celsius and hedge fund Three Arrows Capital circulated throughout the crypto industry. These significant macro factors exacerbated the bearish market mood and pulled down performance even further. As a result, both the U.S. stock market and the cryptocurrency market fell for a while.
However, on July 15, the Federal Reserve Bank of St. Louis President said he was “inclined to raise interest rates by 3 yards rather than 4 yards.” This diluted the fear of raising interest rates, and led to a rebound in the US stock market and the cryptocurrency market. The aforementioned collapse of Luna and Three Arrows Capital was brought about partly because of a high level of leverage, which led to a lack of cash flow when the market tumbled. The deleveraging of the industry sent a positive signal to the market, as it could decrease risk. The crypto market performed better in July, and Bitcoin rose from $20,000 to $23,000, an increase of about 15%. Furthermore, ETH jumped to $1,500, a 40% weekly rise following the announcement of the ETH 2.0 upgrade date.
To summarize, the crypto market appears to have shifted from pessimism to optimism in July compared to June, with the whole crypto market value increasing by 12%.
Top July 2022 Performances
Top 1 – Pulse: ETH-BTC Hourly (+51,00%)
Source: HAL, CoinShares. Past performance not indicative of future results. Capital at risk.
Pulse: ETH-BTC Hourly performed extremely well (+51.00%) compared to its benchmark (+6.31%) in the past month. This trading bot opens either a long or short position depending on market movement.
From July 3 to July 6, the trading bot opened several long positions on ETH to profit from its uptrend. It then neutralized these long positions on July 9, before the July 13 US CPI announcement.
However, owing to erroneous signals and a tumultuous market, this trading bot performed poorly on BTC between July 9 and July 13, opening long positions on July 9. Around July 15, however, it quickly neutralized those positions after a regain of performance.
Fortunately, on July 14, the trading bot seized the opportunity to open several continuous long positions on ETH. This allowed it to benefit from a sharp uptrend triggered by the announcement that Ethereum (ETH) developers picked a mid-September target for the Merge to occur during a conference call on July 14. It then liquidated the positions to take profit around July 24.
Top 2 – Wise: ETH-BTC (+35.89%)
Source: HAL, CoinShares. Past performance not indicative of future results. Capital at risk.
Wise: ETH-BTC also significantly outperformed (+35.89%) its benchmark (+6.31%) in the past month. This trading bot benefits from upward momentums with long positions, taking profit when switching to neutral along the way.
The trading bot began opening several long positions on July 3 on ETH in order to benefit from its upward tendency. Before US CPI for June was released on July 13, these long positions had been neutralized on July 9.
Due to erroneous signals and a chaotic market, this trading bot performed poorly on BTC between July 9 and July 13, with long positions opened on July 9. Around July 15, however, it quickly neutralized those positions as well after a regain of performance.
From July 14 to July 21, the trading bot seized the opportunity to open a number of continuous long positions to profit from the sharp uptrend sparked by the Ethereum Merge announcement. It liquidated these positions around July 24.
Top 3 – Wise: MATIC (+34.41%)
Source: HAL, CoinShares. Past performance not indicative of future results. Capital at risk.
Wise: MATIC performed quite well (+34.41%), even though its performance is lower than its benchmark (+44.88%) in the past month. The Wise: MATIC trading bot can only open a long position to profit from market uptrend movement.
The trading bot opened a long position on July 6, then neutralized the position on July 11 before the US CPI announcement on July 19.
The price of MATIC was positively impacted by the July 14 information that Disney selected Polygon for its Web3-focused accelerator program. The trading bot opened a long position the same day to catch the uptrend triggered by this news.
Moreover, the trading bot neutralized several long positions in order to seize the profits around July 24 after the rapid rise triggered by the Ethereum Community Conference (EthCC) on July 19, for the announcement of Polygon zkEVM.
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Disclaimer:
Investing involves risk, including the possible loss of all the money you invest. In particular, crypto-assets are a highly volatile and speculative asset class. HAL is only suitable for traders who are willing to bear the risk of loss and experience sharp drawdowns. Past performance is not necessarily a guide to future performance.
The purpose of this material is to provide objective, educational and interesting commentary and analysis on developments in the crypto-assets sector. Nothing in this material should be interpreted as constituting an offer of (or any solicitation in connection with) any investment products or services by any member of the CoinShares Group where it may be illegal to do so. Access to any investment products or services of the CoinShares Group is in all cases subject to the applicable laws and regulations relating thereto.