It’s been a few months since I’ve written anything long form. Now that BTC has breached 100k and tailwinds look as bullish as ever, it’s helpful for me to organize and share my thoughts around my strategy for crypto’s “Next Leg”.
I frame crypto as a game. To play a game well you must have a strategy you can execute well. You should understand what the goal, upsides, and downsides of that strategy are. Above all, you must have confidence in the strategy.
For me, the strategy that works best is multi-week to multi-month trades with size (10%+ of total portfolio) based on a narrative thesis. I rarely hold sizable positions in more than 5-6 coins at a time. I look for metas and narratives that are just on the cusp of capturing mainstream attention in crypto and ride that wave up. To be clear, I’m talking about metas that should have multi-month to “cycle” long staying power with spurts of time where they are in main focus. I’m not talking about the 1 day “metas” on pump fun like dead animals, zoo animals, etc.
I don’t “trench” on pump fun at all. I find that game to be low edge, time consuming, and not enjoyable. I know there are younger kids with ex competitive video game backgrounds absolutely crushing. If that’s your speed and you’re smashing it, go for it. There are many ways to win in the game of crypto. I think too many people get blown out playing strategies they aren’t good at or don’t enjoy because they see other players winning a lot with that strategy.
I also do not trade perpetual futures. I am not a sophisticated markets person and don’t have any edge or deep understanding of the product outside of the basics. My background is much more tailored towards pure math and advantage gambling. I believe liquid, onchain crypto is one of the highest EV “advantage gambling” games on the planet and I prefer it instead of trying to compete in perps against more sophisticated and well capitalized participants.
My current belief is the next major narrative in crypto will be a subcategory of AI called AI Intent Systems.
The basic idea is users do not have to understand all the different tools, bridges, protocols, etc. to execute a complex path of transactions. They will just explain to an AI system in natural language what the end goal or intent is, and the AI will execute based on it’s training data of hundreds of millions of transactions and knowledge of protocols.
Example: “Consolidate all my stable coins and find the highest yield over a 6 month time horizon. Be cognizant of transaction costs and protocol security.”
If the tech works it will completely overhaul the UX layer of crypto. Even if it only kind of works, the narrative alone will send this category valuation significantly higher.
There are 2 main leaders in this category.
PROMPT
From Wayfinder and the same team that built Parallels (PRIME). You can currently farm PROMPT by staking PRIME tokens with Wayfinder.
2. SYN
The team behind Synapse is developing Cortex which is an AI intent system. Synapse has been in crypto with a competent team for roughly 3 years now and has one of the most widely used cross-chain infrastructure products in crypto. Additional rumors are swirling that the team is connected or backed by OpenAI/Sam Altman and has a connection with World Coin. At ~150M MCAP, if the rumors are substantiated, this should rapidly reprice on speculation alone.
I am currently farming PROMPT via PRIME tokens (which I also like as an AI gaming play), and am scaling into a SYN Position.
The thing I like best about this narrative is that there is a significant barrier to entry and the tech actually matters to a certain extent. There will of course be LARPs and grifts, but these two teams have a massive head start in product development so it should be relatively easy to establish and protect themselves as leaders in this category.
Let’s talk [myBags]
Majors
BTC -- I still think BTC remains the best R:R play in crypto on a 5 year time frame. I see no reason if you are active in crypto you shouldn’t have a sizable long term BTC position. The incoming US administration should be insanely bullish for BTC and crypto as a whole. I think BTC trades near parity with Gold on a 5-10 year time horizon and am positioning for this. Every time I sell a position I move 20% of the sell into BTC cold storage.
SOL -- SOL is experiencing some choppy price action at the moment but I still remain incredibly bullish it trades at closer parity to ETH as a high performance consumer blockchain. I’m not in the know enough to comment on specifics, but there does seem to be some overhang from a big unlock coming in March 2025. I’ve heard some people I respect state that SOL might be struggling from lack of an additional flywheel as the gamble flywheel from memes and pump fun has mainly exhausted by now. While possible, my thesis is simple that SOL will continue to close the gap to ETH and many active teams and products are choosing SOL as their chain of choice.
ETH -- I’m mostly using ETH to farm something called AO the Computer (AI project from the team behind Arweave) as I own some stETH anyways and I think the yield from AO will be higher than the native ETH yield. I don’t love ETH as an R:R play, but it does have some structural components that are attractive. If institutions start trying to play “catch up” and bid ETH ETFs, I do think ETH could see some very attractive price action.
Memes
My current largest positions are still major animal memes: WIF, POPCAT, and BONK
A little over a year ago when I put on these trades my thesis was fairly straightforward.
Solana was rapidly gaining mindshare and poised to become the major hub of consumer activity onchain this cycle.
Shiba Inu reached 40B mcap at ATH last cycle and I didn’t see a reason why the meme leaders of this cycle (WIF, BONK at the time) couldn’t reach a similar valuation over time with major exchange listings and dominating flows.
The major memes provided a sort of non liquidatable quasi-leverage to Solana itself which was rapidly appreciating in price and poised to continue.
I believe this thesis has faced some invalidation or questioning due to 2 major factors.
1. The sheer amount of memecoins in the marketplace has capped how high newer memes can reach in a 1-2 year time frame
Pump fun and market structure has industrialized memes to a point where there is 0 friction to create a coin and the whole meme market has matured as a trading battleground rather than a one off, fun, whimsical thing. Many participants have no interest in buying established cult coins and many coins struggle to break the the 500M MCAP barrier. Instead of a single 20B memecoin, there are 40 500M memecoins each competing with each other for attention and flows. Differentiation is extremely hard. Time and holder distribution is the number 1 thing the new major memes (PEPE, WIF, BONK, POPCAT, etc.) have working for them. However, I’m hard pressed to find a major catalyst that sends these coins to valuations multiples higher than current because
2. An exchange listing is no longer as powerful as it once was in directing flows to a coin
Exchange listings for memecoins used to be extremely rare and a major catalyst for creating inflows to a coin since many “retail” participants have no idea how to interact with onchain protocols. Just in the last month, Coinbase has listed 5 or 6 memecoins and the market has responded with the tiniest baby pumps on listing which quickly retrace. Getting your memecoin listed no longer seems like a major win, but basic table stakes if you want staying power. The dilution in the exchange marketplace is going to spread flows out to every coin and reduce the valuation they can all reach. The amount of net inflows necessary for these to 10x+ from here seems too large to overcome this dilution. That amount of money may enter which would have pumped 1-5 coins from 2B to 20B, but it’s not going to pump 40 coins to those vals.
I have reached long term capital gains treatment for a couple of these trades which makes a massive difference in how much profit a trade yields for me. I think it’s prudent to use this marker as a time to start scaling out profits.
It is possible that recent under performance is causing me to become a little skittish and capitulate based on how long these coins have chopped in their current market cap ranges. However, I think my reasoning above is rooted in logic and when I lose heavy conviction in something I’m going to act on it. For the sake of all our bags, I hope I’m wrong about these coins and they go absolutely bananas in the next leg since I’m not selling it all.
I am slowly rotating these positions into stables and current AI conviction plays discussed above. My specific exit strategy is discussed below. I will still maintain exposure to these positions as I think they will still serve as good upside beta to SOL itself, but I do believe the meat of the trade has been completed. Always leave a moon bag.
AI
This category is exploding like crazy right now and there is a massive oversupply of coins and projects. Most of it is complete slop or teams pivoting to AI to try to grift money out of a narrative. These are my positions and tokens I think stand out in their respective niches.
ZEREBRO -- My top AI Agent conviction bag. Jeffy has proven to be an active and engaged developer. I believe Zerebro could crack mainstream mindshare and become one of the first “AI celebrities” with a feature from a major hip hop artist on its music. Also imagine an AI celebrity being interviewed on a late night show like Jimmy Kimmel. Some of the reply guy stuff at the moment can be cringe or nonsensical. However, you need to purchase things on what they can become, not what they are. AI coins have a unique advantage (and disadvantage sometimes), that they can change and improve.
HENLO -- More crypto native but smaller MC so favorable R:R ratio. HENLO is a token for an onchain hamster racing game where the hamsters are AI Agents. Ciniz has proven to have a good grasp of crypto culture and how to cultivate attention. The Telegram app looks very legit and responsive. Gambling, cute animals, and AI. Say less. If you like previous cycle analogies, the upside comp here is this is the Axie Infinity of this cycle.
PRIME -- Criminally undervalued on a comparative basis for the competence and longevity of the team that’s been building in AI and gaming.
PROMPT and SYN -- discussed above and the 2 main tokens I’m targeting at the moment.
Defi
AURA -- Aura finance is quietly one of the highest yielding tokens in crypto with a much more liquid lock schedule of 16 weeks compared to 4 year locks on stuff like AERO and CRV. Aura controls a substantial amount of the veBalancer tokens and has provided ~50% APR over the last 2 years on its 2 week bribe schedule via Hidden Hand. The token price has been beat up a bit, but I doubled down at the bottom as it was still providing fantastic yield with catalysts on the horizon. AURA is primarily how I pay myself a “crypto salary”, collecting the bribes from Hidden Hand every 2 weeks.
KMNO -- Kamino is proof that product still somewhat matters in crypto. The token has 10x’d from the summer lows and is still ~5x lower in FDV than its main counterpart on SOL, JUP. The team has built a bunch of useful new products like their leveraged LST multipliers, JLP loop multiplier, and their brand new swap product which I think will be a game changer in bringing them in direct competition with JUP and RAY. I continue to use Kamino every day and stake and hold my tokens I receive from each seasons airdrop. KMNO to $1 is not a meme and I think happens in short order.
Other Small Stuff
DeSci -- I own some small positions in DeSci stuff like URO and TrackedBio. Even though I think the actual science here is most likely complete bullshit, these things can run higher than your worst nightmare on narrative alone.
PILLZ -- Pillzumi is a smallcap AI project that blends art and content creation with AI agents. It feels differentiated from a lot of the other AI reply guy chat GPT slop.
Exit Strategy and Rotation
I don’t have price targets. I take profit either when the total size of the position dwarfs the rest of my portfolio and I want to rebalance a bit / I want to physically vomit when I look at the number, or my thesis is invalidated in the sense the meat of the trade is complete.
Every time I sell, I take 50% into stables or JLP, 20% into BTC, 25% is rotated into my current conviction thesis I’m building a position in, and 5% goes to dry powder to experiment and hyper gamble on new stuff
My risk tolerance and goals will be different than yours. Make your own decisions for what’s right for you and your family. I find this strategy allows me to keep playing while protecting and compounding my capital in yield products.
Don’t Chase but Pay Attention
The worst trades I’ve ever put on are when I chase something at the local top of its mindshare and then it inevitably retraces down. When something is super hot, you don’t necessarily need to rush into the trade, but you sure as shit better pay attention to why it’s so popular. You can look at it and decide for yourself whether you think this is a flash in the pan or a real thing that will have lasting traction. If it’s the latter, when short term hype dies down you can scale into a position for the inevitable second wave.
I think the best current examples of this are Hyperliquid and Fartcoin. Since I don’t trade perps, I “missed” Hyperliquid but I was aware of it and knew many traders thought the product and team were great. Depending on my goals, I may try to build a HYPE position on a pullback (although it doesn’t look like we’re getting one), or play around small in the spot markets over there to try the product myself. Fartcoin is a funny coin in that it has a bit of differentiation from animal memes. It seems to have gained a lot of attention from tradfi and mainstream media accounts as the poster boy for the absurdity of crypto. I’ve put on a bid-ask on Meteora to build a small position on pullbacks and farm some of the fees on high volume.
Learn to Use Defi Tools
Learn to use the Defi tools you have at your exposure to minimize your execution cost, earn some extra yield, and get some airdrop tokens on the top without having to heavily farm. On Solana in particular, learning to use Kamino and DLMM’s on Meteora has made me 10s of thousands of dollars I otherwise wouldn’t have.
Do Not Be Afraid to Invalidate a Thesis
Market dynamics change quickly here. You need to be willing to invalidate a thesis and cut bags when your thesis is clearly flawed. It’s a little tricky sometimes to balance the idea of bad price performance and thesis invalidation. But if you have a cogent thesis it’s not as difficult.
No Borrowed Conviction
You do not need to be the originator of an idea, but you sure as hell better confirm it and have conviction in it. You cannot borrow conviction. In crypto, swings of 25 - 60% to the downside are extremely common. If you have no conviction or borrowed conviction in a position, you will get shaken out and sell these down turns. You will also cut these bags to chase other things and end up chopping yourself up. A perfect example of this personally was AI16Z. Many people on twitter were claiming the token was majorly oversold and the team was still building and competent. I personally hated the way the team conducted themselves publicly and didn’t like the thesis as much. The coin has 7-8x’d from the lows so these folks were right and I was wrong. However, I don’t regret not taking this trade because there is 0% I hold all the way here to that multiplier because of my own feelings about the coin.
Continue to research, scroll twitter, and digest as much information about crypto daily. I do a ton of reading and very little trading or putting on positions. Staying curious with a hyper gamble stack and trying new products for yourself is very important.
I haven’t done as much programming as I’d like in the past year as I’ve mostly been focused on squeezing EV out of the market. I have some ideas for small, fun, daily games I’d like to finish building that utilize crypto in unique ways. They are a little “off-meta” in the sense they have nothing to do with AI, but I shouldn’t let that discourage me.
I’m in a couple solid group chats, but I’ve mostly done crypto as a lone wolf. My closest friends are only crypto adjacent and are heavier into other gambling ventures. I’d like to push myself to meet more people in the space. If you managed to read this whole thing and want to connect, please DM me on twitter.