After a massive rally in April, the crypto market continued to grow and gained 5.8% in the first week of May. However, after weeks of consistent growth, the market went into a correction mode and recorded a sharp loss of 15.3% in just two days. The correction was short-sighted, and the market quickly rebounded to finish the month with a solid gain of 8.4%.

Solidum Crypto Quant Strategy substantially underperformed the market in May. Occasionally, the market dynamics affect investment models in a way where they generate false signals. In the previous month, the crypto market exhibited high fluctuations, which is not an ideal market environment for our investment models. Consequently, the strategy underperformed the market in May with a negative return of -19.39%. We have already upgraded our investment models to enhance our performance in the future.

Chart 1 - Solidum Crypto Quant Performance (2020-05)

No investment strategy performs optimally all the time. Due to different market dynamics, there are periods when it works great and others when it doesn’t. We have analyzed the strategy and benchmark monthly returns and there are sometimes considerable differences in performance.

Chart 2 - SOCQ monthly returns

The goal is that the strategy works effectively most of the time, subsequently outperforming its benchmark over the longer period. We implemented a major investment strategy upgrade in October 2019. In the eight months since the upgrade, Solidum Crypto Quant Strategy generated a return of 29.10% vs. the market return of 17.47%.

Despite the weak performance in May, our strategy is still strongly outperforming the market and its peers, and we are confident that this will remain so in the future.

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.

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