2 months countdown
Fund set-up.
Setting up of the fund in Jersey is taking a bit of time and should be ready within the next 2 months. The SPV is being set-up in collaboration with ISP Group and SmartWealth. The AMC will be investable in early April (through ISIN number). Bitcoin Suisse will be our custodian for crypto assets (85%), while we will trade CME futures (15%) on BTC and ETH with Interactive Brokers.
Market timing update.
The recent email warnings have played out quite well. In the image above, you can see the timing of both emails together with bitcoin price.
On top of taking a short position from the top area, our system flashed risks of a significant crash while at support, and just 2 days later Bitcoin lost >1000$ (>6%) in 45 minutes, losing the uptrend that started the first week of 2023.
Predicting trend reversals is both hard and highly profitable because it is a rare and significant event, but doing so is core to the design of our system.
Insights on our system.
In live.html, you will find the result of an automated strategy specifically designed to take advantage of a bull market, as you can see it is beating the market with great precision. In practice our strategy will not be fully automated, as we will add manual oversight to optimize the execution locally. Right now, the overall performance remains negative because this strategy always remains long-exposed with at least 66% of AUM, while being ran on a down-trending market.
Note the >2 sharpe ratio on the CME futures trading strategy. This proves the inefficiency currently present in this market. We expect this inefficiency and the edge of our system to slowly decrease with time, as top-tier AI tools progressively populate the market, but as of today it seems still largely dominated by amateur and manual traders. Even among hedge funds, we think our system is top-tier for the following reasons:
1. Difficulty (research and innovation needed): it is far from straightforward to apply unsupervised learning to such a young and rapidly evolving market. In other words, the data is rich but original datasets are small and describe a quite non-time-invariant system. Finally, the data is quite sparse and difficult to gather, in order to do so, we work with multiple data providers but also run a bitcoin node and fetch raw ethereum transactions in real-time.
It is far easier to try hard and be discouraged with bad results. Only relentless passion, curiosity and optimism combined with top tier knowledge and education can eventually make it.
2. Time needed: The research & development needed is specific to the data, therefore no amount of PhDs or prior knowledge can make up for the iterations of research and creativity needed. Additionally, the inherent model training durations introduce a time-bottleneck constrained by physical limitations that no infrastructure can overcome. Finally, because research is an iterative process it can hardly be parallelized.
This system is the result of passionate and relentless years of research & development. A journey that started in 2018 during university, continued during my thesis at Turin Tech Intelligence, and has been my full time occupation since then.
By the way, I am attaching here the recommendation letter that got me into TurinTech (London). In that letter, my former professor mentions a Ripple sponsored hackathon (coding competition) where I teamed up with friends, now DeFi founders, to create an arbitrage bot optimizing settlements inside the XRP ledger, back in 2019.
Insights into our strategy.
Our market timing module, which is designed to make the most of the high volatility that characterizes the crypto market, is just one part of the strategy of Anaideia Capital. The other very significant part of our strategy is to invest in the most promising crypto-assets of tomorrow when our system detects absolute exhaustion of the bear market (at the macro-bottom). The plan being to hold them through mainstream adoption, while earning interests/dividends, and as macro conditions enable a new buying frenzy.
By the time we get macro-top signals, we expect no less than x20 on our top holdings, while x100 or more is definitely on the table for all of the smallest ones. When reading these numbers, it is natural for one to assume that the associated risk must be considerable due to cognitive bias. However, it is important to understand that a high reward does not necessarily indicate a high risk, as not all opportunities are born equal.
Our entry: a rare opportunity.
We currently find ourselves at the intersection of a risk-averse environment in the short/medium term and a crypto-market that displays a very bullish outlook in the medium/long term.
As J. Powell commented yesterday, the rate hikes aren't nearly over, which opens the door to a potential recession in the US and induces a lot of fear in the markets. This fear is our opportunity because eventually and sooner rather than later, markets will reach a point of maximum fear where the worst case scenario gets priced in. Thanks to our signals, we will be able to detect that moment precisely and not be fearful but instead enter the market completely, together with the smart money.
4 years ago vs. Today.
During the bear market of 2019-2020, I (Henry) was researching manually through the top 300 coins for the next top performer coins. When the covid crash happened, I raised money among friends and family, and bought ENJ among other coins, which produced 10,000% gains (100x) from bottom to top.
Today, our system includes the 'Project Screener', which produces real-time fundamental analysis of all Ethereum projects. This, alongside our insider network, provides us with a unique advantage in selecting the most certain and promising projects.
A bullish outlook?.
In our opinion, the crypto market has never seen, in its entire history, a bullish outlook and risk-reward set-up as strong as it is today.
Fundamental: Blockchain technologies on the verge of mainstream adoption in various industries. ETH 2.0 is bringing scalability to the entire Ethereum ecosystem, making the technology affordable to use, the protocols economically sustainable and widely profitable in some cases.
Supply: The supply side is scarce and getting scarcer; Ethereum just went through its first issuance reduction, an issuance reduction so dramatic that the total ETH supply has been on the decline since! The Bitcoin halving is coming in less than a year meanwhile crypto assets are capitulating into deep value provoking ramping accumulation.
- Demand: There are 3 undeniable huge demand catalyst on the horizon:
- - Fed monetary policy pivot.
- - Bitcoin and Ethereum spot ETF approvals in the US.
- - Mainstream adoption of Ethereum technologies.
Anaideia.
