September 2020 Newsletter

Hi Ember Crew,

We hope everyone is safe and sound. Please see below for our monthly updates.

📱Company & Product Updates:

    We will be launching an innovative yield farming product in the next week. Stay tuned! Beta has been released and is now closed to new users.
    Custom portfolios have been temporarily removed so we can address the on-chain mining fee issue, we hope to have this feature back soon.
    We’re working on schematics for an Ember coin. If you have ideas on what you’d like to see, email us and let us know!

🔥Milestones:

    We’re fast approaching 30,000 users on Ember Fund!

📊 Fund Performance

    Quant - We remain bullish on bitcoin’s long-term price action but the market did not exhibit any clear direction in September and had a general downward trend for the month. The quant recognized the uncertainty, the strategy switched to USDC on August 23rd at the time, BTC was trading around $11,415. The strategy has been in cash ever since. As we discussed in our previous updates, the model generally trades once every 10 days, however, it is not unusual for the model to stay out of the market for long periods of time or as we saw during the June-July time frame, it could also trade as many as 10 trades in a given month. Bitcoin has been rangebound between $10,300 and $10,800 for the past few months which implies that we could be due for a breakout.

https://i.imgur.com/7Tre5Ey.png

    Image Source: @Whale_map

    Bitcoin found three key support levels over the last two months. See the chart above. The last time bitcoin maintained these levels for this long was on December 1st, 2017. A number of positive developments took place in September that signal that the crypto market is maturing. A newly established crypto bank by the Kraken exchange will open doors for new advancement and new opportunities for blockchain and cryptocurrency projects. The Israeli government is set to recognize bitcoin as a currency rather than an asset. We believe it won’t be long before other countries will follow the same example. Speaking of regulation, we strongly recommend watching the conversation between SEC Chairman Jay Clayton and Brian Brooks, the Acting Comptroller of the Currency as they discussed regulations on digital assets. This is a great discussion.

    Detailed Fact Sheet linked. -Eric

    S-Tier - And then came the altcoin correction, as we can see, which put us into a bit of a predicament for the last few days.

    Fortunately, there was a recovery today.

    However, just last week a massive risk factor has surfaced, the potential death or severe incapacitation of the U.S. president just before the election. There is probably a 50% chance for that to happen which could reverse previously bullish outlooks for the rest of the year. Trump was the one who inflated the stock markets to unprecedented heights with unprecedented money printing.

    While this is obviously good for Bitcoin in the long term, in the short-term it might be very bad for stock markets and Bitcoin, since both have been following a near 1:1 correlation throughout 2020. No matter who is elected on Nov 3rd, uncertainties are very high in the stock markets, which could lead them to tank. Trump won't have to inflate them anymore after the election and Democrats don’t usually maintain massive market manipulation and give trillions to trillion dollar companies.

    All in all, until the election and potentially through the end of the year, risks remain very high for Bitcoin and even more so for altcoins.

    Detailed Fact Sheet linked. -Marius

    Indexes - As many of you already know, this has been a big month for DeFi and cryptocurrency in general. We’ve seen a $200 million KuCoin hack, BitMEX charged by the CFTC and Kik ruling in favor of the SEC. Meanwhile, Bitcoin has been steadily hovering around $10,700. I think this speaks volumes to the resilience of Bitcoin versus the public perception of it even just one year ago. To that end, MicroStrategy CEO Michael Saylor upped his investment to $425 million (previously $250 million), almost 90% of their treasury and 0.1% of all Bitcoin in circulation. Most recently, Square (NYSE:SQ) allocated $50 million, or 1% of their treasury. As discussed previously, this is extremely bullish for Bitcoin given the CEOs of now 2 publicly traded companies have decided to allocate this much of their bank balance to Bitcoin.

    On the ETH and DeFi side of things, we’ve seen the market cool dramatically with multiple coins tanking, as well as mining fees coming down again. Most of the August mania was driven by just that… mania. However we continue to be bullish on this next generation of yield farming products. We believe there will be an entire ecosystem of “codifying (financial) intelligence” that will be 100% community driven. There continues to be scaling challenges on the horizon with ETH but the network effects, brand and development community are still going strong despite interesting developments on other chains. Cutting through all the noise, we maintain our position on ETH being one of the dominant chains for this next generation of DeFi products. -Alex


Feel free to reply to this email with any questions or comments.


Kindest regards,


Alex, Guillaume, Mario

Co-Founders | Ember Fund
W  emberfund.io
E   support@emberfund.io