(Oct 13, 2021)
Taipan Trading and Investments Pte Ltd was registered in Singapore on 6/10/2012. TTI had humble beginnings as a self funded, after work project to see if Technical Analysis could be applied to Bitcoin (there were no other cryptos then.) TTI has since made staggering returns, is supported by a board of directors and advisors; James, Marco, Rhys and Jamie (known as the Taipans) and a team of a full time Chief Operations Officer, Business Development Manager and Data Engineer; Katy, Richard and Glenn. In 2020 TTI became the manager of the Straits Currency Fund and now has dozens of clients. We would like to thank directors, team and clients for their endorsement in this enterprise. We look forward to being able to host you all at the Singapore Cricket Club once again at the annual October party next year…
Latin American Ripple Effect
Brazil – Latin America’s largest country with 212 million recently proposed a bill to regulate crypto currencies. Brazil’s Federal Deputy Aureo Ribeiro has revealed that Brazilians could soon be able to buy houses, cars and even McDonald’s with Bitcoin. Whilst BTC will not be legal tender as in El Salvador, it is clear that Latin American countries are turning to BTC as a possible solution to their long standing currency problems as previously discussed last month. To emphasize this point, Argentina is currently grieving the demise of its ninth version of the Peso since independence. We imagine that Argentinians will cash in Peso #10 for BTC reasonably promptly.
September’s Price Action
September was a month that began well for the broad crypto markets but then BTC/USD suffered a 25% and ETH/USD a 35% pull back. After taking a (comparatively small) initial hit, SCF moved largely to cash for the rest of the month and greatly reduced trading in order to avoid being ‘whipsawed’ in and out of the market and a potential drop for BTC to $35,000. This allowed us a large cash position to buy BTC as October started as we believe it will outperform as the Bitcoin Dominance Index temporarily moves higher in the next few weeks. Despite this recent setback, we remain very bullish about the current crypto cycle for at least another 5 to 6 months.
Whilst we are first and foremost focused on price action, we have always taken futures premiums into account. However, Jamie Coutts kindly invited TTI to speak at a panel for the recent Chartered Market Technician Association APAC Summit alongside an analyst from Glassnode. The age old debate of fundamentals vs technicals was brought to the brave new world of blockchain analysis and algorithmic trading and an agreement was reached that both are important. We intend to further explore how onchain data such as flow of funds to exchanges, hashrate and age of coins sold can be added to our toolbox.
Pactolus & the Mamacos Ratio
Our data engineer Glenn Mamacos, gave a lecture in September regarding the quantitative trading strategy named Pactolus which was well received by all. Integral to the success of any machine based learning is a mathematically defined ‘goal.’ Having explored the traditional finance risk adjusted return measurements and found them wanting, Glenn has created a new metric that provides more guidance to the computer as a holistic measure of success. His essay that explains the Mamacos Ratio can be found in the SCF website. In the meantime, Glenn is working on integrating Pactolus with the crypto brokerage FTX, and SCF will allocate 2% of funds to Pactolus – hopefully in November.