In this month's update, we delve into the latest macroeconomic developments, assess the current state of the crypto market, review our strategies' performance, and share what's new in the Diamond Pigs ecosystem.
Key Highlights:
- Macro Economics: The Federal Reserve may ease its monetary policy as US recession fears grow.
- Crypto Market: A sharp decline in early August, driven by the “yen carry trade,” US election dynamics, and geopolitical & economic uncertainty.
- Strategy Performance: The Hereford strategy demonstrates resilience amid market volatility.
- What’s New: Introduction of an AI-powered strategy matching tool, enhanced tracking features, and a $10 monthly minimum fee.
1. Macro Economics: Latest Developments
The US Bureau of Labor Statistics released its Consumer Price Index (CPI) report, showing a year-on-year increase of 2.9%—the first time CPI has risen by less than 3% since 2021. In early August, poor labor market data further increased the likelihood of a recession in the US. Combined with the low inflation data, this has strengthened the case for the Federal Reserve to ease its monetary policy, potentially reversing the current downtrend and providing the market with a much-needed boost.
However, it is important to note that if the US does enter a recession, the current downtrend may persist or even worsen. Additionally, the US and global economies are facing significant challenges on the geopolitical front, with the ongoing Israeli-Gaza conflict and the Ukraine-Russia war.
2. The State of Crypto: Market Crash and Its Implications
July began on a positive note for the crypto space, largely fueled by US Presidential candidate Donald Trump's pro-crypto stance. Trump, who at the time was safely ahead in the polls and seemed poised to win the presidency in January 2025, made an appearance at the Bitcoin conference in Nashville, injecting optimism into the market.
However, the situation changed sharply in early August. The crypto market experienced a steep decline, triggered by a drop in the dollar-yen exchange rate and the largest single-day stock market decline in Japan since 1987. Bitcoin plunged below $50,000, marking its lowest level since mid-February, while altcoins suffered double-digit losses. The market cap of all crypto assets shed $500 billion, dipping below $2 trillion for the first time in six months.
Several factors contributed to this downturn:
- Rising interest rates in Japan prompted investors to shift funds from risk-on assets to safer investments.
- Trump lost momentum as Kamala Harris entered the race, replacing Joe Biden as the Democratic candidate.
- Concerns over the US economy and uncertainty surrounding Federal Reserve policies fueled market anxiety.
- The cryptocurrency arm of Jump Trading moved large amounts of various coins, including a $46 million transfer of ETH, sparking fears of liquidation and further price drops.
Ethereum was particularly hard hit, losing over 33% of its value between July 24 and August 5. However, the upcoming launch of spot Ethereum ETFs, the expectation of easing interest rates, and promising comments from U.S. Senate Majority Leader Chuck Schumer on potential crypto legislation this year offer hope for a market rebound.
3. Our Strategies: Performance Overview
The market crash on August 5th had a significant impact on several Diamond Pigs strategies, particularly those focused on altcoins and meme coins, as well as the Berkshire strategy, which trades the top 10 coins. In contrast, the Hereford strategy showed resilience, delivering positive results during this volatile period. This success can be attributed to the carefully selected bots powering Hereford, known for their ability to identify extreme market conditions and execute strategic trades.
Gascon, which had entered a long position just before the crash, initially experienced declines but has since recovered most of its losses.
4. What’s New
We’re happy to announce the upcoming release of our AI-powered strategy matching tool, developed in response to user feedback and expectations regarding the short-term performance of various Diamond Pigs strategies. This new feature will help both new and existing users identify the strategy that best aligns with their risk profile and investment goals. By guiding users through a few simple questions, the tool ensures that they select the most suitable strategy.
It's important to note that frequent strategy changes and selecting multiple strategies can lead to weaker performance. We recommend sticking to a single strategy that aligns with your risk profile and possibly supplementing it with HODL positions in a few selected coins using the “Exclude Coins” feature. Adhering to these best practices has been shown to improve long-term performance and align more closely with your financial objectives.
Additionally, we’ve introduced key updates on the Dashboard to simplify tracking:
Enhanced Wallet Balance Display: The wallet balance will now show the “managed” amount separately. This represents the actual portion of your wallet that we actively manage, excluding any locked or excluded assets. This change provides a clearer picture of your managed investments.
Simplified Key Metrics on the Dashboard: We’ve removed the TWR display due to frequent misinterpretations. Instead, we’ve enhanced the main chart on the dashboard with additional key metrics, including wallet fluctuations reflected over selected periods.
These updates are designed to improve clarity and accuracy in tracking your investments, ensuring that you have the most reliable information to guide your decisions.
New Minimum Usage Fee Announcement:
Starting August 1st, we will introduce a minimum usage fee of $10 per month for all Diamond Pigs users. This change, aimed at maintaining our high level of customer support and platform updates, will be reflected in the August invoice sent on September 1st. If your combined performance and management fees are less than $10 in a given month, the difference will be added to meet the $10 minimum. Users still within their free trial will see an adjusted fee based on the remaining days in the month. This ensures that we can continue offering the quality service you expect, regardless of wallet size.
As always, you can reach us via Piggy, our AI-chat support bot, by opening a ticket or sending an email to support@diamondpigs.com.
