From: thepipeline_xyz
This article explores the journey and insights of Anom, a prominent crypto trader, discussing his personal background, trading philosophy, market observations, and advice for new entrants.
Anom’s Crypto Journey and Trading Style
Anom first learned about crypto while studying Computer Science and Business at Georgia Tech, where his emerging technologies class focused on Bitcoin [00:00:54]. Although he learned about it in 2016, he didn’t buy any crypto then [00:01:22]. After graduating and working as a software engineer, his mentor, who was heavily involved in crypto trading, encouraged him to delve deeper [00:01:37]. Anom began researching more intensely and was trading crypto on the side until mid-2021, when he transitioned to full-time trading [00:01:48].
His Crypto Twitter account experienced significant growth, from around 3,000 followers before the last cycle to 100,000 by its end, primarily by publicly sharing his trades [00:02:07]. He emphasizes that being publicly right in real-time, by posting trades and providing updates, builds undeniable credibility [00:04:54].
Market Dynamics and Sentiment
The crypto market is experiencing a rapid influx of new participants, indicating a return of retail interest [00:02:51]. The speed of the current rally has surprised many traders who navigated the bear market [00:03:06]. This rapid repricing is attributed to the severe market hit in 2022, including the FTX collapse and broader financial restrictions, combined with new market participants entering when crypto is still significantly off its all-time highs [00:03:19].
Key Trading Experiences
Anom cites Axi Infinity (Axi) as one of his best trades, not only for its profit and loss (P&L) but also because he had to overcome an initial bias against it, viewing it as a potential scam [00:08:42]. He got long on Axi around 100 [00:10:17].
Another top trade was Solana, which he became bullish on later in 2021, flipping from a heavy Bitcoin position to Solana when other altcoins began to follow Axi’s lead [00:10:29]. He stresses the value of setting alerts for all tickers, as altcoin leaders can signal market direction shifts [00:10:35].
Strategic Trading Principles
Anom’s core principle is to trust his own market analysis over others’ opinions [00:11:50]. He avoids counter-trading sentiment merely because someone else is bullish or bearish, as this can lead to losses, especially in volatile bull markets [00:12:04].
A crucial practice for his strategic trading is consistent journaling of all trades [00:12:33]. This allows him to review his original thought process and avoid emotional decisions when the market moves against his initial expectations [00:12:46]. He’s maintained a long-term bullish conviction on crypto, seeing its fundamental importance even during bear markets [00:13:42].
Fundamentals vs. Price Action
Anom’s investment strategies are a blend of fundamental analysis and price action, with a leaning towards price action for taking actual positions [00:14:36]. He generally avoids charts of projects he considers fundamentally unsound for the long term, though he might take short-term momentum trades on them [00:14:47].
He categorizes his portfolio:
- “Left Curve Bags”: A smaller portion of his portfolio dedicated to momentum trades on assets that might not have long-term fundamental value but are breaking out or have a strong narrative that appeals to retail [00:14:55]. Examples include Cardano, which he believes has little intrinsic worth but can attract retail speculation [00:15:44].
- Long-Term Thesis Holdings: Around 70% of his portfolio is allocated to projects with a strong fundamental thesis, such as Solana, Coinbase, and Bitcoin Prime [00:15:27].
Crypto Misinformation and Perception
The challenge of distinguishing legitimate projects from scams is significant in crypto [00:18:14]. Projects like Hex, which reached a $50 billion market cap at one point despite being viewed by some as a scam, highlight the power of “social signaling” or charismatic leaders in driving speculative premiums [00:16:37]. Anom believes price action is crypto’s most effective marketing tool, even if it brings attention to less legitimate projects [00:18:43].
Overcoming negative public perception, especially regarding NFTs being associated with scams, is a major hurdle [00:36:35]. This perception often stems from people losing money or misinformation spread during previous cycles [00:36:41]. Anom suggests the need for more voices in crypto who can effectively communicate to a retail audience that applications are not scams but rather new architectures for existing concepts [00:37:02].
Emerging Narratives and Future of Crypto Apps
Anom identifies several strong narratives for the upcoming cycle:
- Layer 1 (L1) Chains: Still a powerful narrative, driven by projects like Solana and Avax due to their cost-effectiveness, speed, and superior user experience compared to Ethereum mainnet in its current state [00:30:38].
- Layer 2 (L2) Chains: Also a significant narrative, as L2s work to become competitive with L1s like Solana [00:21:18].
- Modular Blockchain Thesis: This is evolving into specialized components, such as Celestia focusing purely on being a modular data availability layer [00:21:31]. This allows for cheaper data posting for rollups and sovereign rollups [00:21:45].
- Execution Layers: Rollups focusing purely on execution will need to compete with L1s like Solana on transactions per second (TPS), user experience, and fees [00:22:03]. Ethereum’s EIP-4844 (Proto-Danksharding) is expected to significantly reduce rollup transaction costs, increasing competitiveness [00:22:20].
The competition between L1s and L2s for user onboarding will be intense, as users don’t have allegiance to any single chain and will gravitate towards the best applications [00:22:41].
Anom and Kevin emphasize that the true “product market fit” for crypto at scale is still nascent. They argue that the infrastructure to support large-scale consumer applications (millions of daily active users, high transactions per second) has only recently become available, notably with Solana’s emergence in 2021 [00:25:51]. This is akin to the early internet needing increased bandwidth before social media or video streaming could become mainstream [00:28:03].
They are most bullish on the rise of consumer-focused crypto applications over the next two years, believing these apps will become the “main character” of the cycle [00:29:27].
Examples of promising app categories:
- NFT Platforms: Drip House on Solana, a free NFT platform utilizing compressed NFTs, has successfully onboarded over 300,000 users by allowing artists to release art weekly at very low costs [00:30:44]. Users often then explore other Solana DeFi apps [00:31:27].
- Social Apps: Anom sees significant potential in crypto-native social apps due to better incentive alignment for users compared to traditional platforms where users are the product [00:31:35].
- Payment Rails (Stablecoins): Kevin believes stablecoins represent one of the largest and uniquely enabled markets for crypto [00:32:21]. They fulfill Bitcoin’s original vision of peer-to-peer cash [00:32:37]. Projects like Mountain Protocol and Ondo offering yield-bearing stablecoins (T-bill interest) offer an objectively superior solution to existing payment systems like Venmo [00:33:16]. Tether’s widespread use for payments in regions like Africa and South America already demonstrates product-market fit [00:34:05].
- Gaming: Parallel, a trading card game, aims to onboard web2 gamers by allowing them to play without needing a crypto address, then gradually introducing them to in-game NFTs and tokens [00:38:00].
- Sports Betting: Crypto offers a superior experience for gambling, including sports betting, which is gaining mainstream adoption through legalization in new regions [00:41:01].
Navigating Market Signals and Identifying Potential Top Signals
Anom reflects on the difficulty of identifying top signals in the upcoming market, especially since the previous cycle saw unprecedented celebrity endorsement and integration (e.g., Tom Brady and Gisele with FTX) [00:43:54]. He questions if similar events will signal a top or confirm mass adoption [00:44:21]. He highlights the challenge of distinguishing between genuinely widespread adoption and the usual “no idea about crypto starts shilling” behavior that typically signals a market top [00:44:32].
Anom states he will primarily rely on technical analysis (TA) to determine market tops, as he’s good at identifying false breakouts and parabolic moves [00:45:32]. The market could reach over $6 trillion this cycle, making traditional top signals less clear [00:45:55].
Kevin adds that in a bull market, “top signals are indistinguishable from mass adoption” [00:46:27]. This paradox means that if crypto truly achieves mass adoption, long-term believers might sell their stacks just as their thesis is realized [00:46:44].
Large corporations like VanEck, Visa, and T-Mobile are already acknowledging crypto’s value and partnering with projects, even during the bear market, which deviates from past top signal patterns [00:47:34].
Market Risks and Safety
Anom hopes there won’t be another “Luna-type event” this cycle, as people are more cautious about easily breakable mechanisms [00:48:37]. However, he expects continued leverage events and flash crashes, which are inherent to crypto trading [00:48:52].
There’s a positive shift towards greater transparency in new exchanges like Cube and Backpack, contrasting with FTX’s opaque practices [00:49:19]. While researchers tried to warn about Luna’s flaws last cycle, Anom hopes more people will heed smart voices this time [00:50:10]. Despite these efforts, the market still contains a high number of “degens” willing to take high risks, as evidenced by people sending money to contracts explicitly labeled as potential “rugs” [00:50:29].
Getting Started in Crypto for Beginners with Safety Tips
For someone new to crypto with no trading or software engineering background, Anom and Kevin offer the following safety tips and guidance:
- Get a Hardware Wallet: This is the most secure way to store crypto. Anom recommends Trezor or Lattice, noting Ledger’s recent issues [00:54:50].
- Get Active on Crypto Twitter: It’s a vast source of information, but it can be overwhelming. Anom suggests joining with a group of friends to navigate it together and bounce questions off each other [00:55:22]. Kevin echoes this, highlighting the benefit of having a “crew” to explore opportunities and make the experience more enjoyable [00:57:52].
- Set Up a Centralized Exchange Account: Coinbase offers good tutorials for new users [00:54:39].
- Start Small and Explore Applications: Buy a small amount of crypto and begin experimenting with applications [00:56:01].
- Drip House: A free app for receiving NFTs from artists [00:56:11].
- MarginFi: Deposit funds to earn yield by lending out Solana or stablecoins [00:56:18].
- Drift or Zeta: For trading [00:56:30].
- Jupiter: For token swaps [00:56:33].
- Tensor: For trading NFTs [00:56:36].
- Utilize Educational Resources: Podcasts like “The Pipeline” (this one) and Blockworks provide valuable insights directly from founders about their projects [00:56:58].