Broke Bears

(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. Another week in the books and the blur mania continues. I’ll preface this newsletter by saying I am writing this on Sunday morning EST to get ahead of my busy schedule for the next few days. While 48 hours in the NFT space is basically a decade, on the bright side, any predictions I make here, you will immediately be able to tell if my opinions are redacted or if I am truly a gigabrain. Outside of the typical Ape/BenDao FUD this week (while entertaining, never comes true), I didn’t find myself all too glued to my screen.

As a non-blur farmer, I am not continuously buying and dumping 40 Clone X NFTs every hour and instead am looking for undervalued plays or high conviction trades. Unfortunately, there are not many collections that I am looking to giga-ape into at the moment until the farmers get exhausted and lose enough ETH in fees or have their 1000+ .02 ETH losses finally add up. I’m not too bullish on airdrop 2, but that’s a story for another week since the details haven’t been released. Rather than dive into that, I’ll ramble about some other nonsense in the world of internet picture trading, and hopefully you learn a thing or two.

As I mentioned last week, the entire market is essentially in a stalemate with almost every chart looking flat, as the same 5 wallets continue to dump on each other. They look like the chart below. Obviously, we all know how this ended with Machi and Franklin continuing to dump on one another, however, most projects look something like the below.

This is all very fun/exciting since as a non-blur farmer I am unable to participate in reaping the rewards of any of these collections. It’s nice that my bags aren’t going down, but they also aren’t really working for me. I’ve been finding that collections that have been avoiding blur farmers have done quite well. Last week I touched on Overlord, which ended up running from 1.5 to 2.3 and is now back down to earth around ~1.7. Collections with lower volume like that tend to consist of more long-term holders and community members so they aren’t being farmed as much. I’ve been looking to find more collections with similar PA for accumulations/trading purposes. Killabears, which I haven’t touched, is another one that’s interesting to look at as it’s one of the few collections that had a decent week and isn’t being heavily farmed. This strategy has been one I’ve been working on and has played out quite well, similar to the tweet below.

Moving on from specific collections, there is still a hot ball of money floating around in the market. I think being bearish internet pictures is pretty lame at the moment – we seem to forget the 300 million dollars airdropped to gambling addicts. I’d imagine at the very very least, 50% of this is being thrown back into the market over the next few months. ETH also chopped all week, and now that the aggressive farming of blur seems to be slowing down, I think conditions are ripe (for my bags) to send our pictures.

We all have goldfish brains in this space and seem to forget that prices are still down from where they were a month ago. Yes, most Blue Chip NFTs are down over the last month, and this was before 300m was injected into the market. One thing that’s interesting is that while the blur farming continues to die down, blur continues to gain marketshare over Opensea. As a blur maxi (pre and post airdrop) this is unsurprising to me and I personally have not used Opensea since ~November, nor do I think anyone who actually is making money trading PFPs is using OS. Hopefully, we get some sort of incentive to come back, but that seems doubtful to me.

Now let’s be clear. I do not think we are in a bull market. New mints this week like Utopia Avatars was an absolute bust. You had influencers like Faze Banks shilling and sweeping 100s of these during the mint and the project couldn’t even mint 50%. Projects like these alongside a Faze Banks tweet storm would have typically sold out in a bull, so the mania is not back. The market still consists of the same 500 of us dumping on eachother.

Also, the Puma mint was a bit underwhelming. Yes, Puma minted out immediately but at it’s peak only did a 2x. This was a nice win for anyone involved but in even the final stages of the bull, new mints like this would do a quick 4-5x with ease. This was a bit surprising to me. While I’ve been bullish (and still am), I think true mania is further away than I had expected. That being said, I think the top projects (the ones I am buying of course), will be significantly higher by the EOY than they are now. I think the chop and panic selling due to volatility is on our side when looking to accumulate quality.

Last week I posted the below photo (take a look at the 7 day change).

Quite different from the 7 day change this week (see below).

Hindsight is always 20/20. While most were buying during the first picture above and most were selling during the 2nd, you should be doing the opposite. Obviously, past performance is not indicative of future performance but on a short time horizon I’d expect the upcoming week to be a solid one (never financial advice).

Finally, I’m sure most of us are aware, once again their was a ton of FUD around Apes and the BendDao situation. Here’s a good thread below which summed everything up.

Many of you know I’m not really the biggest fan of Yuga, BAYC, etc. While I don’t think Apes will ever hit an ATH in USD value again ($500K), the main reason for my distaste is that I think if you’re gong to spend 70 ETH, there’s 20 projects I can name with a better chance of 2xing from here than Apes. That being said, every time FUD comes around with the apes (this time being how they’re going to collapse because of the lending market), it turns into a buy the dip opportunity. They went from 65 ETH to 58 ETH to 70 ETH in a 24 hour period. While I’m not particularly bullish on Doodles either, the same scenario played out, and if you bought at 4.5 ETH you made a nice quick bag.

Would avoid looking too much into these situations as the worst-case scenario rarely happens. It’s the same as the folks yelling for 10K Bitcoin at the pico bottom, these people are flat earthers (h/t Pigeon).

I’m not saying to buy the FUD as this doesn’t always turn out to be the right decision. But I’d caution listening to MAYC PFPs on twitter with 50k followers writing long threads about how everything is about to go to zero. I wish I had more insight here but there’s really only like 3-4 projects I’m interested in right now at these prices (Penguins, Creepz, Miladys, and Kanpai Pandas) and with the week of new mints going poorly, I don’t have much to to look forward to in order to scratch my degen itch. I guess my generational wealth will be built through my long-term investments in cute animal pictures. At least I know my future children will be proud.

Have a great week.

Cheers,
Wilson