What Could Go Wrong?

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. The sun is shining, the birds are chirping, and our jpegs are appreciating in price. Feels good man. It’s been a few months since I’ve felt this comfy in NFTs and buying the blood the other week has turned out quite well. Buying when everyone thinks we’re going to zero and that feeling of clicking purchase that makes you want to throw up time and time again, has turned out quite well.

I’m back to share some highly opinionated and uneducated thoughts with you all so let’s dive on in.

The big news of the week that dropped yesterday is that blur is now adding even more leverage. Yes, now the average person can put down just 2 ETH and buy an Azuki on margin. This begs the question, does the lender or borrower get to use the PFP? The mechanics of this are quite wild and will surely blow up in our faces in a few months. To be fair I’m not educated on this topic enough and haven’t played around with the system enough to give my technical opinion and jump into the nitty gritty here. Maybe next week. But here’s a great thread from the GOAT Cirrus if you’re interested in learning more.

What I am able to do is share my thoughts on the high-level direction of the market, and at this point I’d like to successfully say I called the ‘local’ bottom of NFTs over the last 2 weeks, especially in my article last week:

Also at the pico bottom, I present you:

Anyways, let’s talk about Blend, Blur’s new tool. Leverage has existed for a while in jpegs. Platforms like NFTfi, Arcade, and the infamous BendDAO have all revolutionized degeneracy by allowing us to take out loans on literal internet pictures. What a time to be alive. However, normie NFT traders are too lazy to learn these tools for the most part (i.e. opportunity). Blur (the only real platform to trade NFTs on) has not only given normies easy leverage with low APR, they have gamified it. Yes, you are now literally incentivized to gamble on pictures. Jonny who bought the top of Moonbirds and Doodles is now ready to “make it all back” by taking out loans and buying a ton of Milady’s for .1 ETH. Not only can he do this, but he’ll earn blur points in the process incentivizing him to move further down the risk curve.

This is going to end horribly for most, and in turn probably blow up in all of our faces. However, I do think (and feel strongly about this) that this has come at the perfect time.

NFTs have bottomed over the last 2 weeks and ETH is ranging, setting up ideal conditions. Another dark horse is that a lot of NFT people have made a 10x, 100x, 1000x on $PEPE - I’m talking real serious money here. This is going to go straight back into shitcoins and NFTs because these people never learn. We’ve already seen Azuki’s and Miladys pump 15% and 25% respectively on the activation of loans and DeGods beginning to pump on anticipation they’re next. We are about to add a frenzy of leverage to the normie NFT market that may drive prices wild.

Who is this good for? It’s great for whales and it’s great for those with a ton of experience in the jpeg lending/borrowing market (i.e. like 7 people). But there’s also another candidate in here as well that most aren’t talking about – it’s me and you, the market participants who were buying all of the FUD over the last 2 weeks and own quality projects with good liquidity like Lil Pudgys. We have been able to stack these for low prices, and leverage is about to pump our bags to Valhalla (I’m being hyperbolic). This is super bullish for those who have been holding quality NFTs at a decent cost basis.

This ponzi is truly crazy and I don’t know how long this will last. I think we see a top for NFTs in 2-10 weeks and I’m referring to quality projects from a price perspective (yes, wide range). NFT cycles (can basically call them macro-jpeg-narratives) are 2.5-4 months and all of this is going to get sped up with Blend. The cycle started ~2 weeks ago at the bottom when NFTs were declared officially dead and ETH hit $2,000.

Now, we also have a saving grace here as well – Blur is dropping 300m tokens at the end of season 2. Blur is $0.62 right now but let’s be conservative and say it will be $0.50 at the time of the airdrop. This is another whopping $150 million USD send back to gambling addicts. Also being ultra conservative, we can say 20% of this is thrown directly back into NFTs (strong belief it will be much more) – this is a nice $30 million injection back into the market. So yeah, I’m thinking we’re back.

There you have it! The TLDR? NFTs will be fun again for the next few weeks at a minimum.

Please do not blow yourself up this time. Have a great week and much love.

Cheers,
Wilson