The beginning of August was very volatile. We experienced a global downturn across all markets, including the cryptocurrency market. The reasons for this decline can be found in macroeconomic signals from around the world. It was triggered by poor economic results from the US, and then compounded by problems in the Japanese market.

In short, on Thursday and Friday, August 2, 2024, the US released economic data on industrial production and employment that was relatively negative. Thus, the market continued to fall into the weekend. The situation was exacerbated by Japan, where the central bank there raised interest rates to lend the Japanese yen. Many traders borrowed cheaply in Japan and invested in other currencies and assets that had higher yields than debt created in yen. But when Japan raised interest rates, traders had to sell their assets to pay off the now unfavourable debt. But this pushed down the price of the assets sold. Other traders found themselves in a situation where their assets did not cover the debt incurred, which led to further selling and further asset price declines. This process set off a spiral. 
 
This has also had an impact on the cryptocurrency market. Bitcoin briefly fell below $50,000 and altcoins in many cases fell below the start of the bull run in 2021 (e.g. FTM, ADA, LTC). 

However, the decline was not of a long-term nature. The market recovered and started to rise again. It turned out that the US results were not as bad as they seemed at first sight, and mostly positive news from the crypto world came to the fore, which gradually pushed prices up. 

For example, Brazil approved the first spot ETF on Solana. Even though Brazil is a small market, this is a major achievement for the fourth (sometimes third) largest cryptocurrency. Especially as discussions about a Solana spot ETF are starting to happen in the US as well. Very cautiously so far, but still.

In the second half of the month, a report emerged that one of the largest US banks, Goldman Sachs, holds bitcoin ETF funds worth about $419 million.

This means that its clients are investing in bitcoin through these exchange-traded funds that have bitcoin as an underlying asset. In 2023, Goldman Sachs managed $2.8 trillion in assets. So the value of the bitcoin portfolio is not even one percent. I think there is definitely room for growth (read with a big smile on your face). 

In addition, the investment advisors of another US bank, Morgan Stanley, can now offer their clients investments in these ETFs. They have 15,000 advisors, which is certainly not a small number.

We'll stay with Goldman Sachs. According to their report, the risk of a recession in the US economy has fallen to 20%. This report contributed to bitcoin briefly looking below the $65,000 mark in the second half of the month. However, it did not surpass this threshold and by the end of the month was hovering around the sub-$58,000 mark.

 The last piece of interesting information that I consider to be real nonsense is the pre-trial notice by the SEC (US Securities and Exchange Commission) against the online NFT marketplace, the OpenSea platform, for selling securities.

OpenSea is a marketplace where digital authors can offer their works in the form of NFTs. NFT stands for Non-fungible token. While regular tokens, such as PBX, are interchangeable one-for-one and the user doesn't care which one he or she holds specifically, NFT is all about uniqueness. 

You can think of NFT as a type of carrier. There are different media, for example music on tapes, gramophone records or as digital art in MP3 format on a centralized storage like Spotify. Images can be captured on a canvas, graffiti on a wall or as digital art using blockchain technology in the form of NFTs. 
 
The SEC alleges that OpenSea is offering NFTs that they believe constitute securities. Take a look for yourself at OpenSea's website and consider whether you agree that these are securities. I think that the vast majority are simply images on the internet. 

A pre-suit notice, called a Wells Notice, does not automatically mean a lawsuit. We don't even know the actual text of a potential lawsuit. But if it does, it will be another interesting and groundbreaking case in the cryptocurrency field that will affect developments for many years to come. 
 
How did we do last month? 

A market drop like the one at the beginning of the month is a real test of a portfolio. If you don't have the right risk management in place and set rules for what should happen to your portfolio in a situation like this, you panic at times like this. You close positions that shouldn't be closed and, on the contrary, you let the loss deepen where it could have been easily avoided. 

This is where the work of professionals differs from that of retail traders. Professionals have set rules and they follow them. 

The sharp drop at the beginning of the month triggered stop-loss orders on our altcoin portfolio. (A stop-loss is a protective order that automatically sells off a position at a predetermined level if the price moves against you.) This part of the portfolio thus generated a closed loss. Inexperienced retail traders often consider hitting a Stop Loss a mistake, but this order is there precisely to be activated if necessary. 

When the situation calmed down and cleared up, we bought some of the positions again. 

But as bitcoin's dominance of the market continues to grow, that portion of our portfolio is once again at an open loss. 

The reason we maintain this part of the portfolio is because the quality cryptocurrencies we have accumulated in it have significant potential to strongly capture the price bull run in the event that we are not in spot positions on bitcoin and ethereum. 
 
As for spot positions, sticking to the plan paid off nicely here. The market crash triggered our pre-set buy limit orders on bitcoin, ethereum and solana. Thanks to the late surge, our spot portion of the portfolio was able to close a nice profit (up 9% relative to its allocation). 

We currently have all spot positions on majors (BTC, ETH, and SOL) closed. We currently have buy-limit orders set for BTC at about $54,000. We can also adjust this buy limit at any time, for example, if the market goes up in early fall. 

We also managed to trade the decline nicely on our bionic futures trading. After the market calmed down, we could see that the price would try to come back (at least partially) and so we were able to profit nicely from this move using leverage. 

Thus the gains from spot and futures trading covered the loss incurred on altcoins. 

We are currently relatively neutral in our portfolio setup. The altcoin portfolio has almost all of its 25% allocated to this section. The goal, as mentioned, is to capture any growth. The rest is in stablecoins, we don't hold any spot cryptocurrency majors or open futures positions, in case we look even lower in the market. There is some nervousness being felt, although crypto metrics are still in positive numbers. 

For August, we are distributing $63,759 among clients, which is 619,047 PBX with an average return of 0.126%.