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A check-in on the 108Token crypto index

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Satoshi&Co Daily Crypto Newsletter

May 1 · Issue #169 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as our recently-launched podcast series with leading crypto industry participants at our newly-launched website www.satoshiand.co

Listen to our latest podcast here.
As regular readers of this newsletter might know, the 108Token is an index that tracks the top-15 crypto assets.
One the eve of the eighth monthly rebalancing of our 108 token portfolio, we share with our readers insights on how the index composition has changed since our launch and how the token has performed relative to top cryptocurrencies and indices. To recap, 108Token is an index token that tracks the performance of the top 15 cryptocurrencies on a supply-adjusted market cap basis (Year 2050 Supply), with a cap weight of 20% (the maximum portfolio weight for any index constituent).
Indices, and ETFs around indices, are a great way to get broad-based passive exposure, as Vanguard proved. A significant part of capital into the crypto asset class will eventually come in through index-based products, especially once an ETF is approved in the US.
Coming back to the 108 token, Figure 1 shows how NAV has changed over the past 8 months since our first deployment in September 2018. There was the early high of a 1.4x in NAV, partly due to the temporary XRP rally. In the recesses of the crypto winter, with white walkers almost tearing down the wall, it was well below par, but still better than holding plain vanilla BTC or ETH, and now it is back up to 0.85, and inching steadily upwards (along with Arya’s Needle) as the crypto winter shows distinct signs of thawing. (Had to stick in the mandatory GOT references in there!)
Top 15 list almost remains the same…
The top 15 cryptocurrencies by supply-adjusted market pretty much has not really changed except for new entrants such as Tezos, Binance Coin and Bitcoin SV. Tezos made its way straight into the top 15 immediately after its launch, but we held off for a few months before we included it in our portfolio because of security and reliability reasons we had at that point in time. Grin is currently in the top 15 but will not be added to our portfolio until a leading centralized exchange decides to list it.
108Token outperformed most of the highest-valued cryptocurrencies…
Based on since-inception-to-date returns basis, 108Token has outperformed 10 of the leading 12 cryptocurrencies by market cap. 108Token outperformed BTC by 9.9% and ETH by 29%, respectively. Only XRP and LTC are the two cryptocurrencies to outperform 108Token over the last 8-9 months.
In fact, we back-tested a modified version of the 108 strategy, which we call the 108 active. In summary, the strategy gives up a little bit of the upside, but focuses on keeping the NAV focused above 1x. A comparison of the 108 active strategy with the plain vanilla 108 strategy is fairly instructive, and seems to indicate that alpha-generating opportunities do exist in the choppy crypto markets, if you know where to look.
Backtesting Period - Jul'18 to Mar'19
Backtesting Period - Jul'18 to Mar'19
If you are an investor/ asset allocator or portfolio/risk manager in the crypto space or someone that is just. interested in learning more about the 108 active strategy, do reach out to us.
Meanwhile in Crypto Wonderland....
“Tax Refunds in Bitcoin”
Income tax payers in the U.S. now have the option to receive their federal and state refunds in bitcoin. Blockchain payments processor Bitpay announced the news on Tuesday, saying that the firm has partnered with U.S.-based taxation services provider Refundo for the service. Refundo customers can choose to receive all or a portion of a tax refund in bitcoin using its CoinRT product. Taxpayers will have to set up an account to get a unique routing and account number to input on their tax return, according to the announcement.
“Amazon to Open up Blockchain as a Service to Public”
After announcing that they were launching a managed blockchain service late last year, Amazon Web Services  is now opening that service for general availability. It was only about five months ago that AWS chief executive Andy Jassy announced that the company was reversing course on its previous dismissal of blockchain technologies and laid out a new service it would develop on top of open-source frameworks like Hyperledger Fabric and Ethereum. Already companies like AT&T Business, Nestlé and the Singaporean investment market the Singapore Exchange have signed on to use the company’s services.
“Quebec Subsidizes Electricity Costs for Bitcoin Miners”
Canada aims to lure cryptocurrency miners by offering cheap electricity in Quebec. The city’s energy authority, Régie de l’énergie, has asked its largest power provider to set aside an additional 300 megawatts of discounted energy for new bitcoin mining projects. Until now, crypto mining has been fiercely concentrated in China. But as Beijing mulls an outright ban on bitcoin mining, the industry is flocking to Canada.
“Outlook Breach Targeted at Crypto Users”
Earlier this month, Motherboard broke the news that hackers were not only able to access Outlook users’ email metadata as previously reported, but also email content. The breach centered around a hacker getting hold of a Microsoft customer support worker’s login credentials; from there, the hacker could dive into the content of any non-corporate Outlook, Hotmail, or MSN account, Motherboard found. Now, multiple victims have come forward to flag what they believe may be one of the motivating reasons behind the breach: emptying peoples’ cryptocurrency accounts.
Crypto Twitter Pick
Erik Torenberg
Big misalignment between founders & VCs:

VCs take dozens and dozens of shots on goal, founders only take one.

Founders should band together & share upside. VCs should facilitate this.
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
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Brought to you by Satoshi&Co
Brought to you by Satoshi&Co
This newsletter does not constitute an offering of securities in any jurisdiction. The contents of this note should not be construed as investment advice or as a recommendation to purchase securities. This note is intended for the consumption of the recipient alone and not for public distribution. Please consult a certified financial advisor or other appropriate practitioner as may be appropriate as per your jurisdiction.
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