Chain Venturer: naniXBT of APG Capital

Understanding inflows and market inefficiencies in crypto.

Marco Manoppo
March 09, 2024

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Happy Weekend 🙋🏻‍♂️,

Welcome to Chain Venturer, a series of intriguing conversations with crypto investors. This week, we have naniXBT of APG Capital.

naniXBT is an angel investor and trader in the crypto space and a member of APG Capital. APG Capital is a group of extremely crypto-native traders and investors with various experiences that can contribute to early-stage projects.

They began scaling their investing activities in December 2023.

If you would like to participate in a future episode, DM me here.

-Marco

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Anyway, enjoy this week’s conversation.

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naniXBT of APG Capital

naniXBT is an angel investor and trader in the crypto space and a member of APG Capital and partyhatDAO.

APG Capital is a group of crypto-native traders and investors with various experiences that can contribute to early-stage projects. They began scaling their investing activities in December 2023.

In 2023, we've been dabbling in VC/Angel investing and now want to scale up our operations.
If you are raising feel free to DM us, we will read any and all decks!
-APG
— APG Capital (@apg_capital)
3:16 AM • Dec 22, 2023

naniXBT participated in the seed round of Nest Wallet, a multi-chain wallet designed specifically for traders. This innovative wallet, notable for its 2FA feature, is optimized for enhanced security. Additionally, naniXBT has invested in Kodiak, Berachain’s native liquidity hub, Omega, and Blast, the L2 with native yield.

Discover more about naniXBT and APG Capital in our conversation below.

Here’s my conversation with naniXBT.

Quick takeaways:

naniXBT's journey into the crypto world began with Bitcoin transactions during RuneScape gaming sessions.
naniXBT is bullish on AI, Move-based blockchains, and gaming in the current cycle.
naniXBT thinks collaboration with a network of skilled traders through group chats plays a crucial role in forming market predictions and making informed decisions.
Crypto isn't a self-sustaining ecosystem; it needs external inflows to keep the market active due to the daily emission of mined coins and the launch of new ones.
Crypto’s biggest risk is the reliance on external flows to sustain the market, amidst challenges in broader adoption and the need for more real-world integrations beyond the internet.

The following paragraphs are not verbatim quotes. These are paraphrases of our conversations optimized for written media formats. Some context and nuances might not have been conveyed properly in the process.

The author of this issue is not responsible for any misconstrued statements made in the issue.

All information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.

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What was the defining moment that drew you into the world of crypto?

naniXBT's journey into the world of cryptocurrency began with casual Bitcoin transactions amidst RuneScape gaming sessions between 2011 and 2013.

Being underage and without access to banking or online financial services, naniXBT relied on Bitcoin and other early digital currencies for transactions, marking an initial, albeit unfocused, foray into the crypto space.

A real interest in cryptocurrency emerged post-2016, after graduating from college and entering the workforce. The allure was clear: the crypto market presented as a vastly inefficient landscape ripe for financial exploration, unlike the stable, slow-moving bond market.

The defining moment: The inefficiencies of the crypto market, particularly in its early days, were stark. Platforms like EtherDelta required manual order entries, leading to frequent user errors that could be exploited for profit. The thrill of capturing these opportunities, especially in less regulated, high-risk exchanges like HitBTC, was intoxicating. Despite the inherent risks, naniXBT managed to navigate these waters successfully, leveraging market inefficiencies for substantial gains. This period of early trading solidified naniXBT's commitment to the crypto market, driven by the potential for significant returns.

One memorable moment: On March 12th, 2020, during the COVID-19 market crash, naniXBT experienced a memorable event. Bitcoin's price dropped from 7.7K to 5K overnight, surprising even experienced traders and showing just how unpredictable the crypto market can be.

naniXBT faced significant losses on BitMEX due to sudden liquidations. However, he had some fiat on another platform, and with that, he managed to kickstart all his lost funds.

What do you think about the current state of inefficiencies in the crypto market?

naniXBT notes that the most obvious inefficiencies in the cryptocurrency market, such as errors from malfunctioning bots, poor market-making algorithms, and typing mistakes, have mostly been addressed. Yet, these inefficiencies still occasionally surface.

For example, there was a recent situation where Pudgy Penguins were listed at significantly different prices on Blur and OpenSea compared to the less popular Coinbase NFT marketplace, due to outdated listings. This price difference went unnoticed for a couple of days, pointing out that such discrepancies can be overlooked in the fast-paced crypto market.

In another instance, during a notable dip in the Curve market, there was a brief period where the price of Sushiswap significantly diverged from that on centralized exchanges. This created a short window for a potential 4X gain on investments, which naniXBT missed due to not having available funds on-chain at the time. Instead, naniXBT attempted a short position on a centralized exchange as a speculative strategy but later recognized that directly exploiting the price difference on-chain would have been more profitable.

These examples highlight naniXBT's view that while major inefficiencies are rarer now, the crypto market still presents occasional opportunities for those who are vigilant. The complexity and breadth of opportunities in the market mean that some opportunities are not immediately obvious or are only available for a brief time.

How do you manage your trading strategies?

As a solo operator, naniXBT manages his finances independently, focusing on identifying and following market trends for the upcoming days or weeks. He said that the ideal holding period for tokens is typically two to three months, acknowledging the rapid pace at which attention shifts in the crypto space.

Given the lifecycle of a coin, which includes a few months of fluctuation before marking up and eventually fading as the focus shifts to newer opportunities, naniXBT adapts its strategy accordingly, choosing between trading futures, spot tokens, or exploring new launches based on what the market might favor in the short term.

His typical day involves waking up and catching up on missed communications on Telegram, Twitter, and Discord, along with the latest news, to assess how positions are performing and if any immediate actions are needed.

Collaboration plays a crucial role, with group chats providing a platform to exchange ideas with others who have specific expertise, such as futures or on-chain trading. This collective intelligence helps naniXBT to anticipate market movements and make informed decisions.

naniXBT leverages this network of skilled traders to form predictions about market directions. Additionally, by analyzing Twitter sentiment and comparing it against the insights from trusted sources within their network, naniXBT gauges potential discrepancies or confirmations in market trends. This methodical approach to trend analysis and decision-making is how naniXBT navigates the complexities of the cryptocurrency market, maximizing opportunities for success.

Tell us more about APG Capital

APG Capital originated as a collective of traders exchanging ideas through a group chat, evolving from individual direct messages (DMs) to a more structured form of communication. The acronym APG stands for Awawat Paid Group, a playful take on the concept of paid Twitter groups. The group, initially a small circle, expanded as its members recognized a shared value in their discussions.

Recognizing the potential to leverage their collective expertise beyond just trading, APG Capital ventured into the realm of venture investments. The shift was partly motivated by the desire for capital efficiency, as futures trading often requires substantial margins, leaving surplus funds idle. Venture investments presented an opportunity to utilize this excess capital more effectively.

APG Capital noticed a gap in the market where many projects, often spearheaded by talented developers, lacked the business or marketing acumen necessary for broader success. Identifying its strength in trading, APG Capital saw an opportunity to offer advisory services to these projects, helping bridge the gap between development and market presence. Their involvement could significantly enhance a project's visibility, user base, and overall market traction, especially if the project catered to the trading community.

How do you view the current market for private deals? Have you noticed a change in how people feel about interacting with mostly pseudo-anonymous individuals in these deals, especially compared to attitudes before 2021?

naniXBT observes a significant shift in the private deal landscape, particularly after the launch of Blast. This event stirred considerable debate across various crypto communities, from traders to developers, highlighting the impact of its marketing approach. It was Blast's controversial launch that prompted a reconsideration of marketing strategies, particularly the inclusion of native crypto Twitter (CT) personalities. Offering checks to pseudo-anonymous (anon) has become the norm even if the amount is smaller compared to VC checks.

The strategy capitalizes on the influence of market leaders. When these individuals discuss a project in which they're invested, especially one they genuinely believe in, it naturally drives the conversation and interest toward that project, benefiting both the product and its backers through increased user engagement and fee generation. This creates a self-sustaining cycle of growth and exposure, marking a departure from traditional VC-only funding rounds.

naniXBT highlights a personal investment experience, contrasting the involvement levels between individual angels and large VC firms. For massive funds, a million-dollar investment is a minor commitment, often seen as just another entry in their portfolio. In contrast, individual investors, like naniXBT, who contribute substantial amounts relative to their net worth, are more motivated to actively support and promote their investments.

This dynamic suggests a future where the private deal market may lean more towards equitable opportunities for individuals and collective groups, moving away from scenarios where retail investors are left purchasing at significantly marked-up prices from VCs.

Are there specific sectors you're particularly interested in?

naniXBT believes AI will emerge as a pivotal theme in 2024, noting Sam Altman's ambitious fundraising goals that highlight the sector's potential scale. The natural synergy between AI and cryptocurrency, both inherently digital, suggests a promising intersection for future projects. While the manifestation of such a project remains uncertain, the potential for a groundbreaking collaboration is a significant area of interest for naniXBT.

Additionally, naniXBT is keen on the development of new Move-based blockchains like Aptsos and Sui, praising their superior user experience compared to existing EVM platforms. The noticeable speed, smooth operation, and immediate feedback of these blockchains represent a substantial improvement over previous technologies, which often suffered from infrastructure inefficiencies. As these platforms continue to mature and attract users, their full potential is yet to be realized, making them a noteworthy sector for 2024.

Gaming is another sector that naniXBT is excited about, drawing from personal experiences as an avid RuneScape player. The prospect of integrating similar gaming experiences onto blockchain platforms is particularly intriguing, representing a fusion of nostalgia and innovation. naniXBT looks forward to the possibility of on-chain games that capture the essence of traditional gaming while leveraging the unique capabilities of the crypto infrastructure.

Rapid Fire Questions

What's one piece of content every aspiring investment professional should read/watch?
- Su Zhu tweets and podcasts up to 2021.
What’s your biggest investment mistake?
- DeFi Kingdoms.
What’s the most underrated use case of crypto?
- Being able to send money anywhere in the world and then have it confirmed instantly.
What’s your most contrarian view in crypto right now?
- Crypto isn't a self-sustaining ecosystem; it needs external inflows to keep the market active due to the daily emission of mined coins and the launch of new ones.
What’s the biggest risk that the crypto space is facing?
- The reliance on external flows to sustain the market, amidst challenges in broader adoption and the need for more real-world integrations beyond the internet.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.