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May 2022: One Button Capital Report

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A complete summary of the cryptocurrency industry in May 2022 and extensive research on three macroeconomic topics.

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One Button Capital
June 3, 2022
Jun 3

Welcome,

In the first One Button Capital report, we set the stage for all future releases. The goal of the paper is to you everything you need to know about the cryptocurrency market, leaving nothing out. For ease of understanding, we will divide each monthly report into four parts, as follows:

  1. market summary with an analytical and fundamental analysis.
  2. research section on economic, technological, and wealth management topics.
  3. performance and case studies of One Button Capital.
  4. company and product updates.

Now, let us move on to some statistics and analytical analysis of last month's price movement.

Part I: Market Summary

The current bear market hit a lot of investors deep in their pockets. The total market capitalization of the cryptocurrency market dropped by a looping $400B+ during May 2022, while Bitcoin set a new negative record with its ninth consecutive red weekly candle. Let’s analyze further what led to this performance.

Price Update

A table from messari.io of the overall cryptocurrency performance for May, 2022.

Global cryptocurrency market capitalization:

Over the last two months, the global crypto market cap has been reduced by more than $1 trillion. The sharpest drop came in the first three weeks of May, 2022, following the Terra (LUNA) crash.

Table from CoinGecko

Bitcoin’s price action

Bitcoin (BTC) did not have it easy either. The leading cryptocurrency set a negative record with the ninth weekly red candle in a row and is currently consolidating around $30.000. From an analytical standpoint, the number one objective for BTC right now is testing the psychological levels.

Live table from TradingView

Perhaps one of the biggest wins for Bitcoin is the fact that many experts believe that the digital asset finally broke its correlation with the stock market. This is important as we want to use BTC as a hedge against other risky investments and inflation.

Consequences of The Terra Meltdown

When Terra's ecosystem, which included its native coin LUNA and algorithmic stablecoin TerraUSD (UST), went down, it sent shockwaves through the blockchain and cryptocurrency world as a whole.

Not only did the value of terra-ecosystem tokens like Anchor's ANC drop, but widespread fear, uncertainty, and doubt also sent the market-leading cryptocurrencies Bitcoin (BTC) and Ether (ETH) below $27,000 and $1,800, respectively, on some exchanges.


“Luna will hit $1 before UST” was one of the most shared tweets.

A huge blow to industry confidence

The collapse of the LUNA and UST crypto-currencies wiped out a lot of people's fortunes. Not only hedge funds didn't know about the risks of staking algo-stablecoins, but so did regular users. Some even lost their life savings.

Regulators took the bait.

The collapse of the Terra coin is fuel for crypto critics in Congress. The lack of regulations, user protections, and risk-mitigation systems is cited as part of the reason behind its collapse.

Senator Elizabeth Warren has said that "shadowy super coders" and criminals are in charge of decentralized finance and cryptocurrencies. Together with Senator Tina Smith, the lawmaker wrote that investing in cryptocurrencies is risky and speculative.

AI Trading Bots' Response To LUNA

On May 7, 2022, LUNA started its descent from $80 per token to oblivion. On May 11, it reached $1, and the next day it was $0.01, making all the project investors deeply disappointed. 

One Button Capital traded LUNA market pairs at the time, and a few strategies were still in use during the bleeding period. How did they react? 

The first market reaction we observed was by the Performer v2 strategy trading on the LUNA:BUSD pair. On May 9, 20:05, the robot sold its LUNA position completely at $59.30. On May 10, just after 17 hours, the price of LUNA was already at $29.65, saving the investor from a -50% loss. 

A trading bot that traded a LUNA pair for over four months. Source: OBC app.


The second notable account of LUNA trading is held by the Clipper AI strategy, quitting the position on May 8 at $65.93 per LUNA and riding it all the way down to $3.90 and not trading ever since.

Trade history of one of the AI bots that fell under the LUNA apocalypse. Source OBC app.


Another interesting situation happened to the strategies that traded LUNA until it reached its lows on May 14. One of the Performer v2 bots entered a position at around $0.0001, buying more than 600,000 LUNA. On the same day, the price of LUNA went up by more than +200%, giving the user an incredible ROI and offsetting previous losses.

Screenshot of daily strategy return vs LUNA return during May 14 - May 15, 2022. Source: OBC app

Screenshot of weekly strategy return vs LUNA return during May 9 - May 15, 2022. Source: OBC app

Another example shared by one of our community members, Noidea, revolves around the trailing stop-loss feature available on the OBC app. On May 7, the “emergency brake” was triggered on the LUNA:USDT market pair – all the LUNA was sold at $75 and the strategy was deactivated. We all know what happened after that. 

Here is the feedback by Noidea himself:

It's important to keep in mind that manual stop-loss and automatic trailing stop-loss are both important risk management tools that can be used with the OBC app's premium features. Those can be extremely useful instruments during times like these and save investors from “black swan”-type outlier events like what happened with LUNA. 

Another feedback from one of the users about the stop-loss feature.

Summary

LUNA and UST meltdowns have been terrifying experiences for all the people invested in the project. This event highlighted the importance of risk management and portfolio diversification when investing in cryptocurrencies. When within 24 hours the value of your portfolio can go down by -99%, you never want to leave yourself unprotected. 

By at least using automated trading tools and stop-losses, investors can already insure that their accounts will not vanish. 

One Button Capital's automated trading strategies handled the LUNA crash to a moderate extent, with some of the strategies selling off before the crash or exiting positions completely due to (trailing) stop-loss. 

It is also worth noting that the OBC AI strategies don’t do fundamental analysis and trade purely on market data. So the fact that the strategies exited the market completely based exclusively on technical data makes it even more fascinating.

Can (Un)stable Coins Crash The Market?

In light of the UST debacle, investors may be wondering how successful stablecoins will be in their role of providing liquidity to the crypto market.

Experts’ opinions
The UST crash has caused investors to question their trust in the stablecoin structure. The way other stablecoins work will also be called into question, Chis Skinner, a fintech expert, says. Investors should do their research and make sure they understand the risk and exposure involved, he adds.

The good things from the situation:

The UST crash could boost other stablecoins like USDC and USDT. Adil Abdulali, head of portfolio management at Securitize Capital, says it will allow other stablecoins and algorithmic experiments.

Abdulali compares stablecoin competition to "survival of the fittest," with enduring projects growing stronger. "It's a competitive space that innovates," he says. Markets move quickly, and failing projects are abandoned.

"When the community loses confidence and there's a run on the currency, everyone taking their money out pulls the rug on the marketplace," Skinner says.

Concerns about retail investors

Investors must treat stablecoins like any other investment. Even if a person is confident that he will not lose his investment, there is always a risk. While stablecoins are a great way to keep your free capital when markets are not favorable, it is still better not to put all of your eggs in one basket.

Part II: Research

To have the full scope of information for our investments, our team of researchers conducts extensive analysis in several fields each month.From macroeconomic topics like the change in the global consumer price index (CPI) to niche subjects like trends in the web3 industry or the state of certain markets within the crypto space, we cover everything. Today, we are sharing with you our latest research on two subjects that shape the vision of One Button Capital. But before that, let us talk a little bit about money and its historical value.

 

The Lost Power Of Money.  A Look At The 5000 Year History Of Money And The Death Of The Greatest Medium Of Exchange.


It is estimated that there is more than $40T of money circulating in the world right now. Ever since its early creation, money has been an inseparable part of human lives. The most simple way of explaining what money is is: "a tool that is used as a medium of exchange and a store of value."

If we want to find out why money as we know it is being devalued each year at an alarming rate, we need to go back in time a bit and analyze the biggest turning points.

Inflation is the decrease in the purchasing power of your money through increased prices.

Stocks are financial instruments representing a share of ownership in a company. 

Crypto is short for "cryptocurrency." It is a digital currency that works without a central bank and is controlled by cryptography (encryption).

Commodities  are raw materials like furs and precious metals.

Brief History Of Money

Money ended the practice of bartering goods for services 5000 years ago, and since then it has taken several physical forms. Different commodities like food, feathers, and coins were used as a medium of exchange before paper money was invented during the 7th century in China (also referred to as banknotes).

In reality, as long as people agree on something as a form of payment and store of value, any asset can be used as money. In other words, money, in a lot of cases, is defined by the trust of people in it.


Money vs. Currency

Even though we use the terms “money” and “currency” as synonyms  they are not the same thing. A currency is a representation of money in a particular country. We often talk about the US dollar, the euro, and other currencies used around the world to explain the amount of money we are talking about. There are more than 180 currencies in the world, while according to CMC, the number of crypto currencies with a market cap above $1B is 56.

Currency Wars and the Need for Regulation

The invention of paper money led to currency wars, where countries printed more money to raise prices and compete for trade. That led to regulations and the creation of the first central bank institutions to stabilize prices.

Introducing the Gold Standard

The other thing that would give regulation to currencies was what's known as the “gold standard."

A gold standard is a financial system where paper money is backed by gold, so one unit of currency can be exchanged for a fixed amount of gold. The gold standard helped stabilize currencies by creating a fixed amount of currency backed by gold, so printing too much paper money hurt a country's credit and caused its currency to fall. The system worked well until the beginning of the 20th century.

Why Money Lost Its Value After 1971

In 1914, a series of events caused the system to break down. World War I started and nations had to print more and more money to pay for the war. Later in the 1930s, when the Great Depression started, currencies began to collapse and governments realized that the gold standard wasn't stable anymore. Britain was the first to go off the standard in September 1931, followed by France, Germany, and other European countries.

But it wasn't until the Nixon Shock in 1971 that the US government stopped using the gold standard and things got extremely bad for people. There is no limit to the amount of money that a government can print. Since 1971, inflation rates in the US have gone up a lot, and even though the dollar's value has gone up a lot, real economic growth has not kept up.

Since then, the US printed more than $20T, of which 80% were issued in the last two years alone in support of the global lockdown situations. With no clear plans from either the US or European institutions on how we are going to recover from this excessive printing, it leaves ordinary people puzzled and worried about their financial future. 


Source: Board of Governors of the Federal Reserve System (US)

               
But, without a doubt, we have experienced other major market crashes in recent decades, and we have recovered admirably from each of them. Or did we really?

Have We Truly Recovered From The Dot Com Crash Of 2001?


When the Internet first made headlines in leading magazines, the world went crazy about it. Many people predicted that this new technology was going to change life as we know it and make those who invested in it stupid rich.

The Rise and Fall of Internet Companies

In the 1990s and early 2000s, companies that operated online were booming, and Internet stocks increased in value dramatically. Everyone was trying to invest in the Internet and make a fortune. The market was drastically increasing and everything was working just fine until the collapse of the dot-com bubble in 2001. Many companies lost nearly 99% of their value, and many even went bankrupt.

Some examples of companies that managed to recover are Amazon and Yahoo!

Yes, this will happen to a lot of new crypto companies, and probably not many will make it through the first phase of mainstream adoption. But this is a crucial part in the growth of DeFi, like the first Bitcoin purchase of two large pizzas for 10,000 BTC in 2010—it doesn’t look logical at this moment, but without it we wouldn’t be where we are today.

Recovery and uprise

The stock market has since gone up, and a lot of new technology companies have emerged. In the last twenty years, the SP500 alone has increased by more than 420%, making many people believe that it is a good place to invest their money.

The two major crashes in the last two decades were the dotcom bubble in 2001 and the housing-financial crisis in 2008. The SP500 and the overall stock market have recovered both times... Or did it?

Is this only an illusion?

But did we really recover from the dotcom bubble? Remember our friend inflation, and what caused it? Since the creation of the Federal Reserve in 1913, every dollar that you put into the bank has lost about 98% of its value. If we compare the performance of the SP500, gold, and other commodities against the increase of money supply since the 1970s, we find that the SP500 is rising at a much slower rate than money supply.

Now, looking at the adjusted graph with the M3 (total money supply) taken in mind, we can see that the recovery in 2008 was twice less impactful as we thought, and we are just reaching those levels now. 

And when you think about it makes complete sense. Even if $1000 invested twenty years ago are worth $5000 today, the amount of things you could buy back then with $1000 is less than the amount of things you can buy with $5000 today. An example is the average cost of living in New York in 2000. You could buy a two bedroom apartment for $1200 in Times Square, but the same apartment will cost around $2000 per month today.

Is Bitcoin The Solution?

The 2008 housing crash caused yet another destabilizing currency crisis that left a lot of people without homes and money. It was then when an anonymous figure by the name of Satoshi Nakamoto proposed Bitcoin as an alternative to the broken financial system in his whitepaper in October 2008.

The system
Nakamoto suggests that if a peer-to-peer system were created, based on cryptographic proof instead of trust, it would let people securely transfer money without having to rely on third parties such as banks. While not perfect, Bitcoin is the closest thing we have to a truly "decentralized" currency, one that is completely free from manipulation.

Benefits over fiat currencies
Another great feature of this and many other cryptocurrencies is that they have a defined cap on the number of transactions. units that can be mined, like precious metals like gold, whose supply is limited and known. That makes them deflationary, unlike fiat currencies like the U.S.

Growth and mass adoption
Moving forward 14 years, the global cryptocurrency market cap has surpassed the trillion dollar mark on several occasions, and millions of people have already adapted to crypto in their everyday life. Despite the two meltdowns of the market in 2018 and 2021, crypto has successfully recovered both times, and the rise of its value is proportional to the increased money supply worldwide.

Despite its youth, Bitcoin has proven to be an excellent inflation hedge. The above graph adjusts the BTC price against the M3 money supply. As we can see, the value is still high despite the global economic crisis.

Conclusion

Money went through numerous metamorphis. From physical coins to printed money, and now, eventually, digital cash. This evolution has brought many benefits, such as easy payment, decentralization, and transparency, but has also led to the creation of new problems that are yet to be solved with the further growth of the industry and the attraction of developers.

Decentralized finance (DeFi) has a long road in front of it, but, as the number of applications on top of blockchains is growing exponentially, it is only a matter of time until it becomes the alternative way of using money for most people. The digitalisation of currencies and use of online banking isn’t revolutionary with crypto, but the blockchain technology and cryptography encoding is exactly what we are missing in our current system to prevent collapses through hyperinflation.

Investing in emerging decentralized applications is appealing but, at the same time, very risky. Again, if we look back at the dotcom crash, it’s difficult to say if we passed that phase in crypto, we will be hit with a great wipe before things start going up for good. In either case, the best thing that investors can do is extensively study the trends in the field they are interested in, and make only educated decisions.

Will DeFi return the lost power of money? The statistics at this point indicate yes, and it is only a matter of time.


Uprising trends in Web3 and Blockchain finance

We think that decentralized technology will help shape the next wave of computer innovations and even whole new economic sectors. Many experts divide the Internet into three historical phases: Web1 from the 1980s to 1990s; Web2 from the 2000s to 2010s; and right now we are entering Web3 in the 2020s.

Web3 stands out because it is getting better at storing data permanently in a decentralized way.  That opens the door for a new generation of truly trustworthy applications built on blockchains and linked data, which can allow users to control their own data and choose who to share it with.

Our objective now is to analyze rising trends in Web3 and, more specifically, Blockchain finance, and see which sectors are expected to have the highest growth in the next 5–10 years.


Web3
 describes the third generation of the Internet: the Internet of Things and decentralized apps.

Blockchain is a peer-to-peer distributed ledger that cryptographically timestamps transactions and stores them in an immutable public database. 

Macro Forces and Emerging Trends

The first major trend in Web3 is expected to be the decentralization of money. Right now, the financial ecosystem is undergoing a complete transformation, with more and more people moving away from banks.

Digital wallets

Digital wallets like Coinbase, Circle, and Xapo are leading the way in the digital revolution of money. They offer a much simpler way to store and send money. They can give users more control over their digital assets or the ability to sign smart contracts, allowing them to have more autonomy. Over $25M+ people use a wallet from a single provider like Trust Wallet, for example.

Other dApps

In 2021, for the development of Blockchain technology, $6.6B was spent, and is projected to go up to $19B by 2024.

In the most recent funding round, the asset management firm of Andreessen Horowitz raised $4.5B from private investors. They plan to use the money to help build decentralized applications (dApps) and the backbone of blockchain systems.

Crypto has surpassed the 4.0% global adoption mark. Source: Triple-A

Cryptocurrencies

One of the most discussed topics in May 2022 was about stablecoins. While most people are familiar with Bitcoin, stablecoins are the most widely used type of cryptocurrency. Stablecoins are assets that are "pegged" to another asset or a basket of assets. Price stability is achieved as a result of this, allowing people to transact with digital representations of commodities and currencies. About $150B are locked in the current top 3 stable coins Tether, USD Coin and Binance USD.

Algorithmic stablecoins

Another group of stablecoins are so-called “algo coins” that use mathematical formulas to maintain the correct ratio of the coin to its real world asset. The fall of Terra(LUNA) was the second huge crash of algorithmic stable coins in the last year after the TITAN coin fiasco in 2021 when it lost -95% of its value in one month.

Future development

The main goal of web3 companies would be to make the blockchain network more accessible to users. The development of the lighting network for faster transactions in Bitcoin or the upgraded Ethereum 2.0 version are examples of ways to improve the user experience, so when a larger percentage of people join crypto, they have fewer issues like high transaction costs for small payments.

The 2021 crypto hype attracted many new users into the industry. Over  10 million new people have created crypto wallets in the past two years, and the amount of money raised via ICOs hit $27B. The increased interest led to many developers and creators transitioning in crypto and further assisting in the development.

We are looking at repeating the cycle again in the next 2-3 years with the development of DApps, hardware wallets, and multiple core protocols.

Banking

Decentralized banking is another innovation of the web3 Internet phase. Nick Szabo was the first person to talk about decentralized banking. It lets people send payments to each other safely and cheaply using a token or cryptocurrency like Bitcoin.

In 2021, decentralized banking grew by 1500 percent, and in 2022, the value of transactions secured by cryptocurrencies was over $14T

Another recent study shows that banks and insurance companies are using artificial intelligence to automate credit risk modeling and update the way credit scores are calculated. This further validates our thesis that AI is crucial for asset management in the digital age.

DeFi

Decentralized finance, or DeFi Decentralized finance, or DeFi, means using P2P technology and cryptography to allow individuals, companies, and entities to make and receive payments without the need for traditional financial institutions.

The most promising trends in DeFi are using open-source tools and platforms to create solutions that lower the cost of financial services.

According to a research paper by Future Today Institute, the DeFi types of projects that we should watch closely are digital wallets (Trust Wallet), staking (Ethereum), and smart oracles (Polkadot).

A graph showing the growth of DeFi technology between Oct 2017 and May 2022. Rapid development after mid 2021!

State of the wealth management market

In our first report, we also wanted to touch on the current state of the wealth management market—the sector in which One Button Capital operates. 

Wealth management is the professional practice of investing and growing assets while also minimizing risk and preserving wealth.

Market Capitalization

Despite being shaken during the 2008 financial crisis—according to the Federal Reserve, households lost 20% of their wealth across the U.S. between 2007 and 2009—the wealth management industry has since re-emerged, seemingly unscathed. The wealth management industry worldwide is estimated to hold $103 trillion in assets under management (AUM), making it an enormously large sector. For comparison, the value of the US gross domestic product (GDP) is $20.94 trillion (2020), around ⅕ of the assets being under management.

More than half of managed assets belong to institutional investors like banks and funds. The rest belongs to smaller organizations or individuals. Retail portfolios, representing 41% of global assets at $42 trillion, grew by 11% in 2020, while institutional investments grew at a similar pace to reach $61 trillion, or 59% of the global market. Retail investors were the main driver of net inflow, contributing 4.4% of net new capital in 2020, twice the size of the contribution made by institutional investors (2.2%).

Wealth Management in Crypto

Assets under management (AUM) of crypto funds continued to grow worldwide since the beginning of 2018. Crypto funds' cumulative AUM surpassed $20 billion for the first time in 2020 and reached a peak of $59.6 billion at the end of the third quarter of 2021.

Data shows that institutional investors now own almost 8% of the total supply of Bitcoin. The top holders now have hundreds of thousands of bitcoins in their care. 

Performance

The performance of wealth management providers ranges from the type of solution and the investment horizon.  

Indexes

For example, the Standard & Poor’s (S&P) index's historic annualized average return of around 10.5% since its inception in 1957

Mutual Funds

For stock mutual funds, a “good” long-term return (annualized, for 10 years or more) is 8% to 10%. For bond mutual funds, a good long-term return would be 4% to 5%. For the last 10 years, the mean annual returns of the mutual fund were 8.51%. In 2021, 816 funds returned 91.73% to -8.37% with mean annual performance being 11.54%

Hedge Funds

Despite the reputation of hedge funds to have an ability to generate alpha, their profitability dropped significantly in the last decade. An equally weighted hedge fund index returned a cumulative 225% from 1997 to 2007 but just 25% over the 2008–2016 period. A recent study on the basis of the Warren Buffet experiment conducted that the average annual gain of five funds of funds ranged from 0.3% to 6.5% from 2011 to 2020. 

As of the recent data, hedge fund managers produced an aggregate performance of 10.3% in 2021, underperforming the S&P index which showed gains of 26.61% that year. 

There are also outliers in the hedge fund industry that deliver remarkable returns over a long time period. Perhaps the most enigmatic and impressive hedge fund on Wall Street is Renaissance Technologies' Medallion fund, which from 1988 to 2018 clocked annualized returns of 66%. After fees, those annualized returns were still remarkable, at 39%. Citadel's long-term track record is remarkable, with a 31-year annualized return of 19%

Crypto Funds

Since the cryptocurrency markets are relatively new, the track record data of funds operating in this industry is scattered or undisclosed. 

Pantera Capital, one of the first players in the crypto asset management market, has shown a compound annual growth rate (CAGR) of 99.9% from Q3 2013 to 2021. For reference, Bitcoin’s CAGR for the same time period is 98.44%.

Statistics from Pantera Capital’s Fund Presentationz

The median crypto hedge fund returned +128% in 2020 (vs. +30% in 2019). However, neither of them was able to outperform BTC itself, which went up 305% in 2020. A similar conclusion can be drawn from 2019 data, when BTC rallied 95% in that year. 

Most of the asset managers who entered the market in recent years weren’t able to catch the 300%+ annual gains in Bitcoin and, therefore, make significant returns for investors. However, the most powerful weapon in the arsenal of successful emerging fund managers is the excess returns of the underlying assets.

For example, since One Button Capital launched its trading strategies in November 2020, they have delivered an average monthly excess return of 4.22% on top of Bitcoin to date. However, it doesn’t mean the strategies were making a profit – it only means that they were doing better than Bitcoin by 4.22% per month. Some of the most successful strategies were outperforming the underlying asset by as much as 4.70% per month.

Average monthly performance for the top four trading strategies when ran for 3+ months. 

The absolute gains from the strategies, however, don’t look that impressive (yet). The last 6 month aggregated performance shows that OB Capital strategies are down by 12.23%, while Bitcoin and Ethereum are down by 48.56% and 50.91%, respectively.

Returns of OBC vs. BTC vs. ETH since December, 2021.

Yet, data from some of the strategies that were actively trading before the Q4 2021-Q2 2022 bear market shows its capacity to generate profits. For instance, the BTC: USDT trading bot created on February 12, 2021 using the Astral strategy returned a +87.10% net profit over 15 months of trading when the underlying asset was down by -38.8% for the same period. Remarkable numbers in both relative and absolute terms.

Trading Bot vs. a Bitcoin market pair with an activity of over 15 months. Soure: OBC app.

The final judgment becomes evident: the earlier you entered the crypto market as an asset manager, the better annual returns and growth rates you can demonstrate due to the remarkable gains shown by the crypto market itself since inception. But that doesn't mean that the performance of these funds is better than Bitcoin, which is used as a benchmark. Only a few asset managers can demonstrate such results in the long run. 

Conclusion

The wealth management industry has been growing massively throughout the last decades, with a few remarkable players leading the market with consistent returns. The estimated capital under management globally is $103 trillion. 

There is an emerging trend in the growing market of retail investors. With the growth of technology, more and more households are getting access to high-tech investment tools every year. This gives retail fintech investment product creators a lot of opportunities to tap into the growing market share.

The cryptocurrency market is growing as well, with players from traditional finance moving their capital into the decentralized domain. More and more retail investors are becoming educated about the crypto markets and showing an interest in investing in the space. 

Asset managers who are the first to act on growth opportunities and take advantage of them are likely to gain a strong advantage that will last for a long time. 

Part III: OBC Performance

May 2022 was certainly not the brightest month for the crypto markets, yet One Button Capital fund didn’t get such exposure to the downside. The aggregated performance of OB trading strategies was about -0.4% for this month, whereas Bitcoin and Ethereum fell by -15.31% and -27.76%, respectively. 

Data from May 1 to May 31. Source: OBC app


The most volatile time period of the month was from May 8 to 12, where OB strategies experienced an aggregated drawdown of -9.34% but then subsequently regained the same value during May 12–16. 

The second half of the month was relatively calm, with no extreme movements in cryptocurrency markets.

Strategies

Out of the 8 AI-based strategies that are currently running on One Button Capital, Performer v2 had the highest average returns, while the Solar strategy did the best against the market. 

Source: OBC app

Market Pairs

The most successful market pairs traded by One Button Capital in May, 2022 were XMR: USDT, EGLD: USDT, and BNB: USDT, with an average of +18.29% between the three market pairs.

May, 2022 return of the top traded market pairs at OBC Source: OBC app


Anticipating the Crash

The artificial intelligence (AI) technology made by One Button Capital shows once again that it can predict big market drops. On May 5, at our analytics center, we saw that almost all sell orders were carried out by all strategies. This was true for all traded market pairs. In a 2-4 hour time span, the markets went down by 6–8%.

Source: OBC app


Subsequently, the AI strategies, again almost unitedly, bought back into the market when it made a slight recovery, scoring modest profits for the day. That was almost hypnotizing to watch.


Source: OBC app


Performer v2 – Recession Predictor

The second generation of performers performed exceptionally well in May, anticipating at least three market crashes: May 5 at 13:00 UTC, May 11 at 11:00 UTC, May 12 at 08:00 UTC, and May 26 at 01:00 UTC, saving investors from significant losses.

Chart of ETH: USDC for May, 2022 with Buys/Sells of the AI strategy. Source: TradingView + OBC Internal Statistics


In total, this model saved our subscribers from more than 32% in losses on the Ethereum trading pair alone. 

Performer v2 vs. Ethereum during May, 2022. Source: OBC app

Quite often, we find ourselves amused while watching the trade history on our One Button app accounts. The trades executed within less than a 24-hour period are made with such precision that any human trader would become jealous.



Not Just A “Beat-The-Market-When-It-Goes-Down” Tool, But Make Money Tool

During the last 6 months, we received a lot of feedback from investors about One Button Capital's trading strategies. One of the main points is that One Button AI strategies can’t make money—they can only beat the benchmark when the market goes down. 

Yes, that’s true that most of the strategies at One Button were launched during bear markets (May 2021 and November 2022), therefore data gathered throughout those periods suggests that most of the absolute returns for them are in the red. Nonetheless, the relative performance to the market is exceptional, outperforming the benchmark by more than 4% per month on average. 

But it’s not just the relative performance that shines. We did a more thorough analysis of the trading strategies that were active during bull or mixed market periods and gathered examples of outstanding performance both in terms of absolute and relative returns.

Below are just some of the examples of One Button Capital strategies active for more than 4 months (some of them active for more than a year) and their related market performance. 

As we can see from the data, in the long term, these AI strategies can be both in the green and beat the market regardless of whether the market is up or down. 

Later next month, we'll put out case studies that go into more detail about each of the strategies. 

Long-Term Investment Vehicle

Another interesting insight appeared when we compared the performance of strategies active for more than 3 months to all strategies. 

Only 61.59% of Performer v2 strategies for the last 180 days outperformed the market. However, more than 84.31% of them did if we only show the ones active for at least 3 months.  

This further illustrates the point that One Button Capital is a long-term investment tool, not an overnight success tool. With most of the strategies bearing fruit after 3 months of trading, we wouldn’t suggest investors get discouraged and disable the accounts if the first 1-4 weeks' results are not extraordinary. As we saw in the previous sections, AI can take time to spot the right opportunities in the market. But when it does, the positive results don’t wait too long to appear. 


“Far from perfect, but by far the best” – Community Feedback Section

In this section, we’ll go through some of the highlights of the trading experience shared by our community members. 

Noidea has been an avid tester of many trading bots and asset management solutions on the market for at least the last 2 years. He’s been tracking the performance of One Button Capital strategies since almost the very beginning and had reached meaningful conclusions about their relative performance to the rest of the trading automation market:

Source: OB Hub on Discord


Noidea also offered an interesting perspective when analyzing the investment performance: he suggested looking not only at the returns in terms of USD but also at the performance relative to the cryptocurrency.

For example, if the value of the account at the beginning of trading was 1 ETH (price of ETH = $3159), and in the end is 1.5 ETH (price of ETH = $1962), which equals $2943 in terms of USD value, it is considered as a +50% gain in ETH, not a -6.7% loss in USD.

Source: OB Hub on Discord


Measuring the buying power of your assets can be a great metric to track your performance in bearish markets. Even if the USD value of the account goes lower, the amount of crypto it can purchase can grow exponentially higher. 

Ezza was keen to share the ongoing performance of his trading strategies on the LTC market:

Source: OB Hub on Discord


More highlights from the One Button Capital community are below:

Source: OB Hub on Discord


Want to enter the conversation? Join our Discord community channel by this link and say “Hi”.

More Case Studies:

Part IV: Company News

In the past month, One Button Capital went through a full rebrand of the company. While its core values of making returns for its investors through Alpha-generating strategies powered by AI technology are still the same, the overall business model has changed slightly with the introduction of the OBC Fund.

Read the full One Button Capital rebranding announcement

The things that stand out right away are the new name, branding colors, and overhaul of the website and app of the company. With a couple of new trading strategies on their way (that are unlike anything else on the market), it was necessary to change the appearance of the products to match the firm’s values.

Upcoming events:

 Crypto Expo Asia, 2022

  • On June 22-23 the Raffles City Convention Centre, Singapore will host on of the biggest crypto events this year. Join Max and One Button Capital by booking your ticket from https://cryptoexpoasia.com/
  • We will hold a speech about the One Button Capital Fund and the superiority of using AI/ML trading technology when managing money through cryptocurrency assets.
  • Alternatively, follow Max’s Twitter account for a possible live stream of the event (not guaranteed).

Product Updates

Here are the recent features implemented on the One Button Capital online app in May:

  1. Portfolio overview step

We have introduced a new step in the portfolio creation process aiming to visualize the portfolio allocation distribution between various trading AIs and markets.

Source: OBC app


  1. Functionality to show/hide sensitive bot information.

Want to avoid spraying eyes or are you just not comfortable sharing your investment details? We have introduced a new functionality that allows you to hide or show sensitive data about your investment in certain AIs. You can enable it by clicking on the “Hide Balance” button on the top.

Source: OBC app


Source: OBC app


  1. Update on the public statistics

With the recent updates, we have separated the general statistics from the AI-specific statistics and we have added separate controls and filters.

Furthermore, now you can always know when the statistics were updated with the update indicators located on each section.

Source: OBC app


  1. Support for new stable coins.

We have introduced portfolio creation with the following new stable coins:

Binance - USDC

Binance.US - USD

  1. Other updates
  • Removal of AI slots restrictions for subscription plans
  • Improved system for tracking Binance API credentials’ expiration
  • Improved system for tracking AI runtime errors
  • Drag-and-drop functionality for rearranging the columns on the public statistics

“We are striving to deliver a true One Button experience for our investors in 2022”

– Stoyan Ivanov, Head of Development at OB Capital

Final Word

May 2022 was undoubtedly one of the biggest challenges we had in recent crypto history. The shake of the Terra collapse reached the whole market, while many investors not only lost their money but also exited the industry for good. In times of disaster, a new foundation began its construction in the eyes of institutions raising billions of dollars in capital and reinvesting it into further development of the future digital economy.

At One Button Capital, we saved our investors from huge portfolio losses during the prolonged bear market that started in April. Our AI trading technology proved once again to be an excellent tool against recession and it did its job with high precision while the team was working on other parts of the bussiness. We can safely say that this puts the OBC software next to other household names in terms of performance during high market volatility.

With the introduction of One Button Capital fund, we aim to create even bigger value for our investors through automated trading technology that had proven itself over the last 2 years.

Apply to join the fund here.

We believe that the upcoming summer 2022 will be bright for the blockchain industry and cryptocurrency markets and will keep on contributing with our research and developments in technology-driven portfolio management.


Best regards,
Max Yampolsky, CEO at One Button Capital
ir@onebutton.capital

One Button in Media

One Button Resources

Disclaimer: This is not financial advice. This newsletter is strictly educational and does not provide investment advice, solicit the purchase or sale of any assets, or encourage readers to make financial decisions. Please use caution and conduct independent research.

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