📱 And We Thought FTX Drama Was Over...

Happy Monday dear subscribers! In today’s Newsletter, more ETFs, and a Phone Hack involving FTX?

In today's bulletin, we are covering:

• Surfing the Market, with analysis about BTC and SHIB

• Don't miss the News about New ETF Applications and a Hack at FTX?

• MANTA Network is under the spotlight.

• Short article about Drawdowns!

• Our selection of the best Gems on X

Nice consolidation for Bitcoin during the weekend which is right now printing a textbook bullish pennant. I remain bullish overall. The first challenge will be the $45,000 resistance

SHIB consolidating and respecting the main support, approaching again to the main downtrend resistance

VSFG Readies Spot Bitcoin ETF Application, Eyes Ethereum ETF in Hong Kong

Venture Smart Financial Holdings Ltd. (VSFG), a Hong Kong-based financial services firm, is gearing up to apply for a spot Ethereum exchange-traded fund (ETF) after potentially launching its spot bitcoin ETF in the first quarter.

VSFG Chairman Lawrence Chu revealed that the firm is in the final phase of submitting its application for a spot bitcoin ETF to the Hong Kong Securities and Futures Commission.

• VSFG plans to apply for a spot Ethereum ETF after launching its spot bitcoin ETF.

• The firm is in the final phase of submitting its application for a spot bitcoin ETF to the Hong Kong Securities and Futures Commission.

• VSFG targets a second-quarter submission for the spot Ethereum ETF, pending approval of its spot bitcoin ETF.

• Several fund companies in Hong Kong are preparing to apply for spot bitcoin ETFs, indicating potential competition and a race to lower fees among asset managers.

• VSFG aims to assist ETF issuers in navigating the digital asset landscape in Hong Kong, leveraging its expertise and service provision capabilities.

Chu mentioned that VSFG targets a second-quarter submission for the spot Ethereum ETF, depending on the approval and listing of its spot bitcoin ETF in the first quarter.

Additionally, several fund companies in Hong Kong are preparing to apply for spot bitcoin ETFs, hinting at potential competition and a race to lower fees among asset managers.

Trio Charged in Phone Hacking Scheme Tied to FTX's $400M Crypto Theft

The U.S. federal government charged three individuals with a phone hacking conspiracy involving the theft of $400 million from FTX as the exchange faced collapse.

Prosecutors accused Robert Powell, Carter Rohn, and Emily Hernandez of wire fraud and identity theft related to their operation of a SIM swapping ring targeting fifty victims from March 2021 to April 2023.

• U.S. federal government charges three individuals with phone hacking conspiracy.

• Robert Powell, Carter Rohn, and Emily Hernandez accused of wire fraud and identity theft in SIM swapping ring targeting fifty victims from March 2021 to April 2023.

• Trio allegedly stole $400 million from an unidentified company on Nov 11, 2022, reportedly FTX.

• Charges provide insight into the disappearance of funds during FTX's bankruptcy protection filing.

The trio's most significant heist occurred on Nov 11, 2022, allegedly siphoning funds from an unidentified company, reportedly FTX.

These charges shed light on the mystery surrounding the disappearance of funds during FTX's bankruptcy protection filing.

MANTA Network

The spotlight this week is set on MANTA Network,  the modular L2 for ZK applications.

The project focuses on enhancing user privacy. Manta Network makes it possible to conduct private transactions and execute confidential smart contracts without sacrificing security or transparency.

This project currently offers two networks:

• Atlantic: ZK L1 chain for confidentiality on-chain and web3.

• Pacific: Modular L2 scalable EVM environment for dApps.

It’s powered by Celestia, Polygon, Optimism and Polkadot.

The Network offers different features, thanks to the use of ZKPs that are generating transaction proofs, some of them are:

• Privacy: Users can send and receive assets without revealing their identities or the amounts of assets being transferred. 

• Confidentiality: Users can execute smart contracts without revealing the terms of the contracts or the data being processed. 

• Native privacy dApps: Manta Network is building a suite, such as a private DEX and a private lending platform that will allow users to participate in DeFi without revealing their identities or transaction history.

The $MANTA token allows holders to participate in governance decisions, stake for rewards and contribute for the security of the protocol by collator delegation. The token is also used for fees and allows participants to participate in liquidity provision.

You might have heard about the project  because their Airdrop campaign was quite sound.

Currently 25% of the tokens are unlocked and in circulation, the rest will follow the vesting release of 2% yearly minting rate until all 1 billion $MANTA tokens are in circulation (max. supply), expected to reach 100% around 2030.

Taking a look into their partners and investors and to the different rounds they managed to raise more than $30M between 2021 and 2023.

I invite you to look into it by yourself in their official Twitter and Website , and let us know your own conclusions in the Discord.

Have a great week!

Drawdowns

One of the most important concepts in trading is that of Drawdown, but very few investors truly understand its meaning. Let's see what it's about and how to use it to our advantage when placing stop losses in our strategies. 

A drawdown is nothing more than the decrease in capital in our account or position from a peak to a relative minimum.

However, it is best observed from a peak to a minimum and back to a peak (like in the picture above). The reason for this is that a decline cannot be considered complete until it recovers the previous level or surpasses it. 

The best way to calculate it is in percentage terms: 

Drawdown: (maximum value - minimum value) / maximum value 

That is, taking the example of $BTC in 2017, if our maximum value is 20K and our minimum value is 3K, the drawdown was 85% ((20-3) / 20 = 0.85).

While it's important to know what it is, the relevant aspect is what we do with that information when initiating new trades, as it serves as a precedent for setting a stop loss and not leaving anything to chance. 

To do this, we need to know our track record to analyze the numbers. 

On one hand, we need to know what our drawdown is at the beginning of a position, that is, the drawdown calculated from the entry point of a trade. On the other hand, we must know the drawdown we usually have when the trade moves in our favor and then declines (this would be the concept described in the formula above). 

So, with this data, we need to obtain the average drawdown and the maximum drawdown when entering a position. With this in mind, we have a reliable figure of how much % space we should leave to accommodate the asset's volatility (here it is important to segment the study as it is not the same for a stock as for a cryptocurrency). 

For example, if our average DD is 10% and our maximum DD is 15%, we have a clear level to place a SL (stop loss). Here, the size of the position will greatly influence whether we position it slightly below the average or beyond the maximum. 

And then, assuming the trade moves in our favor, knowing the average and maximum DD allows us to know how much space to give to the SL or trailing stop. This allows us to move the SL as the price advances, reducing the risk of the operation and ensuring partial profits. 

Using DD as a way to set a SL is a good method but it should be combined with other tools for even better results such as supports, trend lines, Fibonacci levels, Elliott waves, etc.

Be careful out there:

Narratives to watch for:

Blockchain + AI = Bread + Butter: 

Don’t sleep on this market, lots of opportunities to come, see you next week!