Depression of Disbelief

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. Appreciate your patience as I’m a day late here but who’s counting. Another somewhat eventful week in the books and I am happy to say that I managed to avoid losing money on Pixel Penguins (yes I bought on secondary). Overall, not the most fun couple of days in the world of jpegs after ETH had a decent move up above $1,900. The TLDR is that a lot of what I wrote about last week for the most part was wrong. Oh well, can’t win them all. Outside of Azuki’s and 0n1, internet pictures on the blockchain continued to take a hit this week and my beloved Penguins are back below 5 ETH. For other collections like Miladys/Remillios, it does look like we’re in the process of forming a bottom, but anything is possible. Notably, blend is unable to pump collections anymore which I guess isn’t all too surprising. On the other hand, influencers are still collecting $1 million dollars plus in shitcoin pre sales which shows that NFT participants are truly built different. If you’re trading this market, your eyes should light up, as your PVP “opponents”, to put it kindly, are not the brightest. Most discords are a bit quieter than usual, which isn’t surprising. As summer begins and capitulation increases, I expect many to take some time off, enjoy the nice weather, and touch grass. Not me though, I’ll continue ruining my eyes by staring at my computer all day.

We’re heading into June and are a bit past the 1-year anniversary from the beginning of the NFT bear market. Congratulations to those reading this still (seriously, even I am surprised by the numbers of how many of you are still alive) and we can only hope that by June 2024 things look better. But where does this leave us now?

I’ve continued to pound the pavement for the last few weeks, calling for an NFT summer (for my bags of course). Yes, I’m aware that this isn’t turning out great for me at the moment. Despite this, we don’t live in a world of zero opportunities. You could have minted 10 bitcoin miladys and hit a 15x in a few days this week, 3x’d off the bottom with Nakamigos, or just watched your bags steadily climb the ladder if you own ordinals. Captainz are pushing past 9 ETH and Mad Lads on Solana are also floating around an ATH floor price.

It’s not always sunshine and rainbows, but we’d be remised to not think that this summer won’t have it’s goblintown moment, and this time, there’s a lot less people to catch a move like that. Yes, you can argue that this makes moves less aggressive, but quick run ups in projects bring new participants to the space. Pepe had all of your normoid friends talking, don’t lie.

With the heavy capitulation of Moonbirds, we’re seeing a ton of the web3 ‘wagmi’ folks leaving the space, complaining about bullying, and a ton of other nonsense. Many of these participants were just tourists and aren’t here for the long-term.

Not to mention, a lot of these individuals dunked on other projects as well. 20 ETH+ projects are now being flipped by names you haven’t heard of in a while, projects deemed as jokes, and others that have been “building in silence”. That being said, as cliche as it is, core holder base and cult-like community are simply the best ‘price-go-up’ mechanisms an NFT project can ask for.

A lot of people lost a lot of money bragging, investing, and gambling on projects based on their large treasury, founder reputation, VC funding, and having some sort of web2 accolades. This worked during the bull market, but over the last year and as of recently, we’re seeing capitulation. And this isn’t just normal selling and moving on. These are people who built their entire brands and digital identities around cartoon pictures on the blockchain. Of course, in hindsight we knew this wouldn’t work out well. Holders, who at points were up 6 figures in profits, are now selling for a loss from their individual investments and we’re seeing some brutal round trips.

This is a true cleansing and reminds me of the Depression stage of the market cycle in the image below. There’s really only one big name left. I don’t think the overall NFT market can bottom (in the sense of price, sentiment, and big players capitulating) until Yuga deals with “real” FUD. Yes, BAYC and MAYC are down 80%+ in ETH terms and 90%+ in USD, but it’s still dangerously close to $100K for a monkey picture. They're the only bull market PFP (outside of punks but these are different) that hasn’t experienced a true death spiral. Eventually, in my penguinish opinion, this will come.

So anyways.. NFT summer right? I got a bit derailed there didn’t I. Both these things can be true. The entire space is a joke right now for the most part and after somebody faked having cancer to raise just ~$100K USD worth of ETH, we’re still hitting new lows.

That being said, there’s still A LOT of money in the casino rotating from one degen to another. Some of this capital (I assume) is beginning to flow into “long-term” investments as the next cycle doesn’t seem so far away. We’ve been in a crypto bear market now for ~18 months and the 4 year cycle thesis isn’t something that’s intimidating anymore. The majority have been witnessing down-only for over a year. I assume most coins are somewhere in disbelief, while Jpegs are hopefully leaving that stage, or getting ready to leave the “Depression” stage. Of course, ETH can rip to 2600 in a few days and our lovely internet pictures on the blockchain drop another 30% in ETH terms.

But, maybe you’re still alive, moving from narrative to narrative, scalping away at what you can. You’re not marrying your bags anymore and are managing to humbly accumulate a few ETH every week or so, storing it away in your cold wallet (not ledger of course). Preparing for what eventually, will be the return of the greatest casino in the world.

Highly recommend the 2 minute video above. If you’re still here, you’re probably doing a pretty good job of staying engaged.

Have a great week!

Cheers