ExogenouWatch #1: 2021 our Q4 performance report




Welcome to the first edition of ExogenouWatch, Exogenou´s weekly newsletter! We will be delivering ExogenouWatch every Sunday evening, directly to our website.


Our goal is simple: be useful.



2021

In numerous ways, we would say that 2021 was a breakthrough year for the cryptocurrency market.

We have seen how Bitcoin hit new record highs, observed the emergence of a legitimate legal framework in many countries which is already having a big impact on the industry, and is gathering institutional support from large companies. The interest of ordinary people in cryptocurrency has skyrocketed this year, mainly because of opinion leaders such as Elon Musk and Jack Dorsey.

But let’s highlight the key events that inevitably influenced not only the BTC price, but the future of the crypto industry.



1. Coinbase IPO:


We think that many people underestimate the importance of this event, especially after its share price has dropped significantly. We want to emphasise that no matter what the price of shares is currently, the very entry of the exchange into the first listing in the history of the crypto industry has great implications for the cryptocurrency market.

The successful listing was a victory for the entire market, as it became a kind of marker of approval and support for the sector from traditional finance. For the industry as a whole, the Coinbase IPO looks like the consent of regulators to work with crypto assets in the legal field. In addition, Coinbase's decision had a positive impact on other market players, for example, Kraken announced its decision to go public in 2022.


2. Binance ban in the UK and Europe


For a very long time, we have heard the position of large traders that although Binance is not a regulated exchange and does not follow the rules of the game, “it is too big a player in the market for anything to happen to it”. However, recent events have shown the opposite. The consistent ban of the exchange in Europe and the introduction of mandatory KYC showed that we have finally come out of the Wild West stage and entered the regulated world (albeit, of course, not ideal yet, but it's a start).


3. The emergence of Bitcoin ETFs


The Bitcoin Strategy ETF is the first U.S. exchange-traded fund based on bitcoin futures from the Chicago Mercantile Exchange (CME Group) and approved by the Securities and Exchange Commission (SEC). The Bitcoin Strategy ETF started trading on 19th October 2021 on the New York Stock Exchange (NYSE). The event attracted a record amount of institutional capital: the firm that launched the Bitcoin futures ETF (BITO) filed an application with the CME to remove restrictions on the maximum amount of contracts to buy.






Of the most anticipated events in 2022,


We would name this to be Ethereum's transition to the PoS model, which will take place until mid-2022. The transition means that the Ethereum Mainnet system will merge with the new Beacon Chain. We think this will be a huge boost for the entire market.


Introduction of a unified European regulation and travel rules for cryptocurrencies - We think this event will be an incredible boost for the entire market, as institutionalists can finally breathe easy knowing that their cryptocurrency is safe and transactions are regulated by law since there is currently some amount of uncertainty, even when trading on the world's leading exchanges.


Certainty about stablecoins - This topic has been, and remains hot for the entire cryptocurrency market. States continue to see the threat and competition for CBDC in stablecoins, and Tether is still issuing new USDTs without distinct collateral. We think next year, we will see stablecoins coming out of the gray zone.


Insights

1.1 Total Result in Q4 2021:


In the 4th quarter of 2021 we managed it, to acquire a return of 87.33%. With this result, we successfully reached our goal, to beat the Markets.



1.1.1 Benchmarks:


As a benchmark we use the CRYPTO10, CRYPTO20, CRYPTO30 Indexes, which represent the markets. For instance: CRYPTO 10, is the index which consists out of the 10 biggest Cryptocurrencies, measured by their market capitalization.


Deeper insight to these benchmarks here:


· CRYPTO 30 Index

· CRYPTO 20 Index

· CRYPTO 10 Index






2.1 Strategy Allocation and decision making in Q4 2021:


This year especially in Q4, we decided to limit us on three strategies which we applied in the markets, due to these highly volitive times. Our decision was made up by our own research which gave us the perfect insight in the cryptocurrency market lifecycle.



2.1.1 Strategy explanation:


· Strategy 1: is a arbitrage strategy based on stablecoins, which is applied on different exchanges at the same time, in order to take part in their liquidity pools.


· Strategy 2: is a strategy, where we approach the market only from a fundamental side. We do use technical analysis as well but only limited to its basics. This strategy is especially designed for long term trades (from 1 Week up to 1 year).


· Strategy 3: is a strategy, where we apply only technical analysis to the markets. This strategy is especially made for day/swing trading. It’s suited for trades which stay open up to 1 week.


2.1.1.1 Decision making:


We decided to invest 56.58% of our Capital in strategy 1, because we don’t want to risk more as needed, to reach our goal. Which is beating the markets for our investors and being helpful for our other clients, in many ways.

31.76% of our Capital was put in our strategy 3, which is based on the quote: “time in the markets always beats timing the markets”. We decided to apply this strategy on the markets because with this strategy, we are able to get perfect insight in a coin and his economics, as well as his lack of liquidity. Which is extremely important in Q4 due to the lifecycle of a single cryptocurrency.


Last but not least, we used strategy 2 with 11.66% of our capital. This strategy is the riskiest one, but can provide huge profits in the perfect phase of a cryptocurrency lifecycle (1,2,3 and 5). As already mentioned, this is a day/swing trading strategy, so we always have to treat it with its needed respect.


3.1 Volatility to Return:



In Q4 of 2021, our second main goal was to minimize volatility, as whished by our investors and Clients from our other services. Our biggest hurdle was to keep the return still as high as possible, in order to beat the markets. Volatility creates opportunity! That’s true but also it creates the risk of being stopped out immediately (which is problematic for Strategy 2 and also for strategy 3 but only in limited ways). We had a cumulative Volatility of 41,52% but we managed it down to a maximum drawdown of 31.85% compared to a return (TTWROR) of 87,33%.




4.1 A Letter from us, your Exogenou Team:


Dear Clients and Investors,


This year was crazier than the last one, we are more than only happy to have you here and being able to not only invest for you, but also assist you and your teams in a smart decision making in the Equity capital markets (ECM). I hope we did a great job and wish you and all of your folks a happy new year, take care, stay healthy and take some time out to spend it with your loved ones. Especially in times like this. All in all, are we certain that the coming year will be packed with many interesting events and new ATHs.


All the best,

Your: Exogneou – Team!