The Art Of Conviction

(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 all and happy Tuesday. Certainly, a less boring week and a decent start to Q2. While I still am not actively trading this crab market, I am certainly dipping my toes back in the ocean of internet pictures. For as long as I’ve been screaming into the void (with no results at times), it’s nice to see my old predictions finally come true. Good things (or the downfall of careless projects who took advantage of their community) take time.

For the last 4-6 weeks, I haven’t been keeping up with the markets as much since transparently there has not been a lot to keep up with. Last week, I touched on how Nakamigos is probably going to zero, and instead it has 2x’d. Can’t win them all! However, while this project will most likely go to 0 at some point (when looking back at my thinking, this was quite obvious in retrospect), I am feeling rusty. Anyways, the point here is that I believe we’re approaching a stage in the market where it’s going to start making a lot more sense to pay attention to NFTs.

Volume has been consolidating and I think this is mainly due to the exhaustion of Blur bidders and those like Machi finally taking his foot off the gas. I mean, if I was down 5000+ ETH, I’d probably do the same. Add to the fact that ETH is in the 1700-1800 range, this is starting to look like some real USD losses.

Anyways, what is there to do in this crab market? I’m of the feeling that opportunities are starting to become more plentiful. I’m not ready to go out and sweep floors just yet but I’ll throw a few bids on a collection like rogs which have gotten unnecessarily hurt. We’re still at the stage where announcements can move the market aggressively. For example, Miladys are up 80% since Zhu Su and Cobie changed their PFP.

Speaking of entering milady territory, let’s also not forget the big news this week: DeGods bridging to ETH. I have mixed feelings here. I honestly like Frank and think he’s a good leader. Despite DeGods having mid art, Y00ts make some of the best PFPs out there. Anyways, we saw a lot of “DeGods will flip Azuki” talk and DeGods pumped from 6 ETH to 11 ETH (in Sol prices) right when the bridge opened. Of course, you’ve seen this story 100 times!

Nothing against the DeGods team, but 8 ETH is quite high and now they’re at the hands of real whales and real NFT flippers. Would I be blown away if the project does well and holds above 10 ETH? Eh, not really. However, I think there is almost no chance they flip MAYC/Azuki in a 15+ ETH range at any point in 2023 (unless entire market goes insane). Now, let’s not get ahead of ourselves. There is still a better chance of this than Moonbirds/Doodles/Clone X ever hitting 10+ ETH again, that is for sure. My message I’d like to get across for the 100th time is to think before you act. If you had waited 24 hours post-hype and got past the “DeGods is the next BAYC” talk, you could have purchased for 3-4 ETH cheaper. Something to keep in mind.

Moving on, it’s funny to see the landscape change. I mean, NFT influencers have to be down horrendously (this is not a meme, seriously check the chain). Outside of Yuga and Azuki, all of the bull market darlings are essentially at the lowest prices they’ve ever been (in ETH and USD value). You’ll notice a lot of them move away from their “forever PFPs” (what a joke) and join the new hot thing (Captainz, Penguins, DeGods, Y00ts, etc). This in my opinion, is a great signal. It means future new entrants are starting to arrive. At the end of the day, if you own Penguins like me, you’ll need somebody to pay 20 ETH+ for this, and who better than some thread-writing VC or think-fluencer.

Influencer capitulation is just beginning. While a lot of these folks are down bad, they also have large bags of ETH to pour into projects. It’s always funny finding Moonbird maxis and others who have called Pengs a scam, rug, and swore they would never touch Penguins are now just beginning to buy. At the end of the day the most important thing in NFTs is the floor price. High price = good project. Retail entering the market is great for new mints and quick FOMO pumps, but influencer capitulation is where the real money will be made. When bullish sentiment comes back, there is a huge open market for Cool Cats, WoW, Moonbirds, Doodles, Clone X, Veefriends, etc. All of these were 10 ETH+ at some point. Right now the only projects taking their place are Penguins, DeGods, and Captainz, which leaves room for a few more. It also leaves room for much higher floor prices when the market heats up.

Finally, if you’ve enjoyed my rant about influencers buying your bags, what about retail. I still like to make quick flips and have some fun, and I’ve certainly been doing this the last 2 weeks on Avalanche. If you’ve been following Chuck and reading Mint Avalanche, there’s been a ton of positive action on that chain. I have various thoughts but will keep them short. The overall gist is that if you have time to focus on other chains, there are countless opportunities to make some easy money. Things have been 3-5xing left and right (a 5x on AVAX is like $100 sorry Chuck) and early participants have been rewarded. Am I as bullish on these ecosystems? From a long-term perspective, tough to say. What I do know is that if there is a narrative emerging, the risk to reward for participating is quite phenomenal. While ETH NFTs may always be the home and place for the big boys, retail can easily throw $200 into avax pictures and quickly turn this to a few thousand dollars. Not generational wealth, but I do think this is enticing, for now.

Looking ahead, a looming worry for me on the horizon is summer being 2 months away – last summer was absolutely awful when it came to volume and making outsized plays. Overall, I am spending my ETH slow and steady on projects I like and am comfortable holding for 3-6 months. As always, thank you for reading my ramblings, which is more or less what this newsletter has become as the markets find themself.

The sun is beginning to rise and I am warm and comfy. May your conviction lead you to purchase only the good pictures, and your enemies full of heavy bags of bad pictures.

Cheers,
Wilson