This post is part of CoinDesk's 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Anil Lulla is a co-founder of Delphi Digital, a research and consulting boutique specializing in digital assets.

Anil Lulla co-founded Delphi Digital in mid-2018 with four friends he met while working at Bloomberg and Deutsche Bank. Their idea: to provide credible, actionable research for an industry populated by noisy clout-chasers and ensnaring scammers. 

“When I left my job, my managing director literally didn’t understand why I was leaving for fake internet money,” Lulla said. In a way, this goodbye proved his thesis – that there wasn’t anything anyone could point to to explain the value proposition of bitcoin, he said. 

“While I personally buy into the crypto ethos, we’re not selling anarchist thoughts, just offering perspective on why should you pay attention: because crypto is a great investment opportunity.” 

More than a year later, Lulla reflects on the intricacies of the market, how a background analyzing distressed debt can help one understand the token industry, and why crypto will always be infinitely more interesting than “real money.”

Has this past year’s cycle – from bust to boom to bust – revealed anything new about how BTC operates?

This cycle has been interesting to see from a crypto fund perspective, which use bitcoin as both an investment and beta. We saw the thesis of bitcoin’s market supremacy play out in real time in the first two quarters, as bitcoin continued to get all the attention and alt-bagholders saw their satoshis disappear. The headlines and investment interest flowing back in proves the reflexivity of the market. It’s also interesting to consider over the past 12 months where every incremental dollar was added in the market. While some was new money, most was sitting on the sidelines from people who had sold their positions and were waiting to come back in. 

What’s the deal with technical analysis? What does it actually tell you, if anything? 

At Delphi, we don’t use TA as much as fundamentals, though we’ve added a little more because it's a trader’s market. If it can help execute trades accurately 60 percent of the time, it’s worth it. But we think bitcoin’s real advantages over traditional assets for market analysis is on-chain indicators. My partner Yan led our UTXO analysis which was used to call the bottom of the market by looking at HODL waves, or when certain massive hodlers start selling. It’s a way to help predict when people will take cash off the table based on their potential returns and selling pressure.

How has the addition of institutional holders affected bitcoin?

It’s a slow change, but we think Bakkt and Fidelity will be huge for the market long term. My team laughed at the focus given to Bakkt’s launch, and the reaction once it didn’t move the needle the first week. The benefit of these products isn’t from short term inflows of capital, but that credible brands are making long-term investments because they view crypto as a long-term project. This allows traditional investors to take risks they wouldn’t otherwise with the latest crypto unicorn. 

Does Delphi get any crossover from traditional finance? 

Whenever you have volatility in the market, we have people crossing over from that side of the market. They may not actually be interested in making an allocation, but funds may have clients who see bitcoin spike and ask them why they are not allocated to that asset, or at least wonder what’s going on. Most conversations revolve around bitcoin. At a macro view, a lot of the people who look at the market seriously are starting to understand the value proposition of bitcoin beyond being a store of value.

If 2019 was year of bitcoin, where does that leave tokens or ICO projects for 2020?

Next year will see a lot of “layer ones” launching. But, the reality is a lot of token projects need help figuring out their economic or governance structures. Meanwhile, a lot of the projects that raised during the 2017 craze have essentially become distressed assets. That doesn’t necessarily mean they’re dead projects. One of crypto’s biggest value propositions is how quickly developments can happen. Maybe the biggest is changes on ethereum. We weren’t even aware of the real efficiency gains of Optimistic Rollups until Vitalik published a blog post. These things come from long periods of hard work and then, to the general public, they seem to come out of nowhere. 

Sometimes I cringe at comparisons between crypto and the early days of e-commerce, just because of the investment activity. In the 90s, every website was an iteration of the same basic website, but with crypto it’s a constant evolution.

The amount of capital coming in also includes human capital. It’s amazing to see what people are creating. The easiest way to talk about crypto is that it’s dis-intermediating middlemen while organizing or incentivizing groups to work together. Instadapp. Uniswap. The composability between projects is incredible. Things like that are why I think this sector will ultimately produce things that are valuable and give mainstream audience no choice but to participate. It's something I’m willing to bet my career on.