24-Hour Bull Market

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Gm everyone. We hope you all enjoyed the December 10, 2022 bull market, where for the first time in a while it felt like we were back for a brief moment in time. Unfortunately, as this was mostly due to Blur airdrop farming, this spike in volume and the associated price pumps were short lived. Overall, we’re still well off the bottom and NFTs have done better than most would have thought in the closing weeks of 2022. I’m still flip flopping on where we go next, but remain cautiously optimistic that we’ve seen the ETH-volume bottom, at least until mid Q1, at which point I’ll reevaluate. Predicting the future, or even a few months out in this space is a fool's errand. In order to succeed in NFTs, you need to remain malleable, which is why so many successful traders (not investors) come off as hypocritical at times. Anyway, most of us had a solid week and were able to use this quick pump to take *some* profits. Plenty of news so let’s dive in.

NFTs In The News

Phantom Wallet is adding Ethereum and Polygon support

Spartan Group, Infinity Ventures Crypto back NFT exchange NF3: Exclusive

Starbucks NFTs are now available to beta testers

Yuga Labs, Moonpay named in celebrity NFT endorsement lawsuit

OpenSea Again Changes Course on NFT Royalties After More Creator Pushback

Digital collectibles firm Forum3 raises $10 million in seed funding

NFTs could help solve diamond certification fraud

Pplpleasr’s Shibuya NFT Video Platform Raises $6.9M to Build the 'A24 of Web3'

Tessera is now live

Market Update

While most including myself expected December to be an absolutely dead month, the first half has been action packed. With a third surprise airdrop from Blur, combined with ETH continuing to chop in the $1,200-$1,300 range, we find ourselves in a better position than I predicted a few weeks ago. With the farming of Blur airdrop #3, we saw a ton of liquidity come into the market. This is because, to earn airdrop 3, you have to place bids on Blur. Volume over the weekend was strong as we saw almost $80 million in sales in just 2 days (Sat/Sun).

Chart: Nansen

It’s funny looking at this chart and discussing how this past week had such high volume. Meanwhile, we’re basically in line with October’s average volume. Have things gotten that bad…

Blur has certainly changed the game for now – it’s funny watching anons rack up bids and then sell at the floor for a decent ETH loss just to farm an airdrop, despite having no idea how the tokenomics will work or what the value of the token will be. Sounds like a recipe for success doesn’t it?

If you’ve been looking to trim your bags, these folks and this pump have been the perfect opportunity to gain liquidity and consolidate your portfolio. Overall, still no signs of normies coming back since all NFTs are still “scams”.

Blue Chips

As you would expect, these collections had quite the positive week. I mean, who wouldn’t want to use the most liquid collections to farm an airdrop, right? However, after the 24-hour bull run over the weekend, most of these projects have retraced and are now flat week-over-week. Data below is from Blur on Monday morning EST:

Yuga ecosystem is holding strong and did a ton of volume this week. With Apecoin staking coming up there is a lot of hype. BAYC and MAYC are flat for the 3rd week in a row around ~66 ETH and ~13 ETH respectively. Both collections have dominated the #1 and #2 spots on the Blur/OpenSea volume charts all week.Moonbirds and Azuki are also flat. Both are at the same prices they were a week ago (8 ETH and 11 ETH respectively) after doing a ton of volume as well. Azuki continues to dominate the high-end rare PFP sales.

What a surprise, Doodles and Clones are the same (6.6 ETH and 6.3 ETH). However, both of these collections *feel* weaker from a sentiment perspective. Doodles hasn’t been able to hold steady above a 7 ETH floor for around a month and there’s a lot of complaints on twitter about how quiet the team is. Clones on the other hand have been dealing with massive FUD from their fumbling of the MNLTH.Cool Cats are flat and still struggling to hold above 2 ETH. Starting to see them less and less on twitter and nobody is really positive about this project. Maybe this is a bottom signal for the cats? Or maybe this is a slow grind much lower.

Let’s talk about Penguins (again). There’s obviously bias here as we’ve been bullish on this project since day 1, and very publicly noted the Penguins’ value around their 1 ETH floor back in June. The Pengs hit an ATH this week of 5 ETH and have now settled back to flat around 4 ETH. Momentum is everything and the pudgies are currently riding that wave. Despite this, Penguins are still struggling to achieve escape velocity reach the next tier of blue chip greatness. I feel strongly this will happen in Q1 2023, but until then the pump is still fun to watch.

Finally, Punks are a 65 ETH stablecoin once again. If we experience some extreme volatility in either direction, I’d still expect these to hold steady +/- 1-2 ETH.

Musings

I have a ton of thoughts to share but will try to keep them concise.

Last week I discussed in depth how new mints (outside of a handful of hyped projects) are completely dead. It also seems like the PFP ponzi is over.

The goal of owning 99% of PFP projects is to simply sell for a higher price. Almost 0 PFPs actually have any utility and the market is realizing this. Punks are high-end collectibles, Apes have rewarded holders with airdrops/coins, Azuki and Penguins are building real brands, and projects like Creepz and My Pet Hooligan are looking to create TV shows. For the most part, the main value accrual is within the IP. For PFPs, you’re essentially making a *high-risk* bet that IP will become valuable in the future. This is why I love Penguins so much as I think they’re universally appealing to everyone of all ages, genders, races.

Moving on, hyped new mints has become a tale of 2 cities. Valhalla mooned to 1 ETH post-mint, dropped to <.5 ETH, and is climbing its way back above .8 ETH after establishing a relatively solid community. While originally I thought this project was way overhyped (and still sort of do), its nice to see overhyped projects succeed post-mint as this is generally a healthy signal for the space. On the other hand, Cockpunch giga-dumped from 4 ETH pre-reveal to .6 ETH. I discuss KPR a lot since I think this had the recipe for a perfectly *overhyped* project (1 ETH to .2) and it looks like Cockpunch is playing out in a similar fashion. Miuzium, which I’ve been discussing for months on end now, is coming up this week. 1001 individual 1/1 art pieces with various mint prices. I expect this to do well, especially as digital art has been on a fantastic run this bear market.

Fade Gabriel Leydon at your own risk. I say this now for the 10th time. This is a fascinating concept from the Digi team to provide free NFTs for everyone during the Superbowl. Since they are building the “Free-to-own” model, this seems to go hand in hand with their ethos. This may end up being a massive event to onboard normies into space. I expect this to be executed very well.

Finally, I’m looking forward to wrapping up 2022. We started off extremely hot this year and we’ve all been through hell in the latter half. With a few weeks left, now is a good time to clean up your portfolio if you haven’t already (and most likely tax lost harvest) and finalize your NFT plan for 2023. While things aren’t just going to suddenly pick up in 2023, I’m expecting a ton of announcements such as various large capital raises from projects/companies in Q1 and Q2 of 2023. As I’ve been sitting on most of my liquidity designated for jpegs for quite some time now, I expect that there'll be some really interesting opportunities in the near future. And if I see nothing I like, I’ll continue to do my best sitting on my hands.

Closing Thoughts

I’ve gone from checking floor prices and Opensea’s trending section 5 times per day, to monitoring both about once a day over the past few weeks. With the a slow grind down and low volume for the past 7 months, the “exhaustion” is really starting to creep in. If you got this far, once again, it looks like you might actually make it. I highly recommend everyone watch the quick clip below.

We’re at the point where it’s basically embarrassing to tell people you’re in crypto/NFTs. Most of the *real world* thought NFTs died months ago. The hardest part is to log in every single day, while your portfolio is flat/down and continue to DYOR, learn, and stay interested.

​​Every day more and more will give up and leave. Instead of checking your jpegs 10x a day, you’ll continue to scroll through CT a few times a week, stay updated with a few projects, and continue to drop a “GM” in discord. When the next wave of participants come back to make life changing money, thinking they’re early, your bags will be fully packed.

Cheers all, have a great week!