As everyone has noticed, all markets took a big hit in January. The overall crypto market lost over 1 trillion in value and the Nasdaq was down 15%, on track for its worst start of the year ever. The sharp pullback across markets was largely driven by fear of higher interest rates and potential reopening consequences.
We have experienced such declines several times now and expect them to continue to occur at least once or twice a year for the foreseeable future. It will take time and further maturation of the industry before we will see real differentiation in price action during such periods of market stress. For us, these periods are viewed as healthy in the sense that they wash out a lot of leverage and excesses, and provide the opportunity for great returns.
Above an overview is provided of the LAIKA bots in January 2022, where it is obvious that the buy-and-hold portfolio bots had a hard time, while the trend bots picked their enter/exit timing ranging from average to very well.
We are confident that the future will bring not only less of these declines, but new LAIKA bots that thrive under these circumstances, and new LAIKA bots that do not depend on the market fluctuations at all.
Laika and the Quants bots team (LQ).