The Great Roundtrip

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. Or just morning, for most of you. I leave to take a small vacation for a week and suddenly everything has been sent to zero. Very nice and thoughtful of all of you. We’re at about month 13 into the NFT bear market and we’re now just starting to see some true blood in the streets. Do I think this is the bottom? As usual, for most projects, no. I have a ton of thoughts to share below so this may be more of just me ranting than anything else – but let’s get into it.

I think everyone should read the above thread. In my opinion, we still haven’t seen blood like the 2017 bear market. My favorite quote here is “Even after this week, selling an Azuki can pay for 6 months of rent. You think this is low???”. This is true, if you told the average person today that an Azuki is still $12,000, they probably wouldn’t believe you. The same goes for basically every single NFT so I guess it’s not the best example but you know what I mean. We can go SO much lower.

I’ve been ringing the bell for a while on BAYC sub 30 ETH and now that we’re finally here, all we have is prices going lower and Machi owning another 70 gearing up for another nuke. MAYC are now below their mint price in USD (only took like 2 years) and HV-MTL has been an utter disaster from an ROI perspective. As I’ve said over and over, Otherside could be the best game ever invented, but this doesn’t warrant a $70,000+ digital avatar. None of this has been surprising to me, or you, if you’ve been listening to me shout this to the heavens since mid 2022.

On the other hand, Azuki had a disaster of a mint (or should say Azuki 2?) and this did surprise me. While I’ve never owned any Azuki assets (coping) it’s safe to say they have been flawless in execution for the most part. I definitely got caught up in the narratives of "perfect team”, “Chinese whales”, “smart money” and missed the point that their core business is selling NFTs. And after this week, it seems like nothing more. Azuki went from having the best “price go up” technology, to all of a sudden being unable to get metadata right on clones of their original NFTs. I don’t blame them for doing what they did, heck, they made ~$40 million dollars in like 2 minutes. I doubt I’ll ever be able to do that in my life. But what I did realize is that they don’t care about holders. That, or they are simply very dumb, and I don’t think they’re dumb. Watching holders in denial and try to defend this move makes me even more bearish. Penguins loved the “art” and “community” so much they literally voted to remove their own team - not defend the actions of people consistently making poor decisions.

General rule of thumb – when a project is on a “downward spiral” yet you see funny memes on the timeline from that community – it’s usually pretty bullish. I think the Milady/Remilio ecosystem has gotten good at this as well. I have a ton of friends who own Azuki, and I don’t wish anything bad upon them. I think a lot of them have been handling the situation well, and are disappointed. In this space, generally speaking, putting anyone on a pedestal is usually bound to result in disappointment. I wish the best for them, but with how bad I think the mint really went (10 minute window? are you kidding?) combined with being one of the most leveraged collections (and Machi owning 200+) I think there’s more room to go down for now at the current 6.4 ETH floor (would be hilarious if I marked the bottom though).

Anyway, I could sit here and write a 5,000 word essay bull posting Penguins after all of this. I mean, they’re the ones building a “real” brand, right?

But before I do that, I have some other musings to share on why NFTs generally will go lower.

Pepe 2.0 hit a 40m market cap in like 3 days earlier this week. Legacy DeFi like Maker and Aave are pumping, and the OG Pepe is up 2x+ from the lows. Risk is on right now and it’s certainly not being funneled toward NFTs. If ETH manages to rip to ~$2500, or even just 10% higher from here, then that will be the final nail in the coffin for NFTs. In this case, I’d look to bid even more Penguins and maybe a few other collections.

There’s still some collections under the radar that seem to be building real products. I’ve been accumulating a rather small bag of Creepz recently (shout out CreepzOTC) for a few reasons. Rather than just shill my bag, I’ll simply use my rationale here as a guide for what to look for in hidden gem NFTs (and I guess shill my bag, though as I’ve stated time and time again, NFA/DYOR).

This project refuses to die, seriously. It’s been at like a 1 ETH floor now for over a year, and they have a working game that’s been pretty addictive to play. The next piece is 100% speculative: there’s a new account PortalCoinXYZ that went live. The Creepz founders have been hinting at a token launch (similar to ApeCoin) for over a year now and said the allocation should be coming to NFT holders this year. Portal has the same font, and same partners as Creepz - Layer Zero and WME (Penguins has this too btw). Anyway, I just wanted to write this short blurb, mainly to pat myself on the back in a few months (hopefully). At the very least, I’d read the thread below to simply just look at what this project is building. Creepz was my largest bag in 2022 and while I sold most higher than the current floor, I think there’s a shiny new narrative that may (seriously NFA the market is horrible right now lol) take place in the coming months. This is the only project outside of the Peng ecosystem that I am prepared to hold through the end of the year (which is rare for me).

Anyways, where was I. Something something something Penguins. Here’s the thing IMO – NFTs, NFT trading, writing cringy threads, etc.. it’s all an addiction. I don’t think people who got tattoos of MBs and Doodles, built their personal brand around a MAYC, or who’ve dedicated 2 years to this space as a digital monkey, are leaving. Even if they roundtrip profits, many still have a decent bag of ETH and many are going to “keep gambling” in the jpeg casino.

While we see more and more of these devastating tweets about “what could have been” come out, the void must always be filled. There will be another NFT bull market at some point. However, the main idea is that these folks will need a new digital identity, and I feel strongly about this. I’m not here to sugar coat anything. This is a PVP environment and anyone who tells you otherwise is trying to sell you sunshine and rainbows. To be clear, big projects dying is not bad for the space in the long-term. We’ve had necessary cleanses, remember PXN.

While the next NFT run will be full of vaporware and ponzis, I do think that the ETH flowing out of these dying projects will flow into the VERY few (cough cough Penguins) projects that are building real products, revenue streams, and an audience. The rest of the ETH will probably flow into shitcoins short term.

Anyway, hope that was exciting and fun to read. It’s good to be back. Despite influencers saying this is the bottom and to buy the blood I think patience here (seriously when doesn’t patience work in NFTs) will be the play. With fungible tokens going up, it seems -EV to be betting heavy on NFTs in the short term. Pick your 1 or 2 projects you think are drastically undervalued (and be cool with the prospect of it all going to 0), send to your ledger, and don’t check the price for 3-6 months. Hopefully you chose the flightless birds.

Have a great week everyone and happy 4th of July to all my fellow Americans.

Much Love,

Wilson