Hedging Financial Crisis With Pictures

(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. What an absolute whirlwind of a week. Banks collapsing, CBDC rhetoric picking up, Bitcoin finding a real use case, and jpegs seemingly holding up ok. After the last few weeks of a lackluster NFT market we finally got some volatility added to the mix. Surprisingly, in the face of global calamity it turns out that certain pictures on the blockchain are actually a pretty decent store of value.

To recap my last few posts, I’ve been sitting on my hands waiting for the time to strike. Not much has changed here for me – I have the perfect combination of liquidity and bags that I'm comfortable with. It’s now been 15 days since I’ve made an NFT purchase or sale and I’m quite cozy with my situation.

“Oh but Wilson, so many blue chips collapsed over the last week, FUD is everywhere, you should buy the dip”. In a post that contains zero financial advice, I personally like to avoid catching a falling knife. In a situation like this, the market has made its decision on what projects are deemed quality, and what are as I like to say Cool Cats 2.0 (no hate here).

The entire Yuga ecosystem, Azuki, and Penguins have barely moved in price during the time we had a top 20 bank collapse while your NFT influencers favorite projects have continued to fall. Again, this is just data and all I am doing is looking at my screen.

We are finally experiencing the 2nd wave of our favorite quote “99% of projects will go to 0”. No I am not saying your favorite ex “blue chip” is doomed forever. But, what I am saying is that your 90% down - 40 ETH to 4 ETH Moonbirds - are never going to recover even 50% of an all time high. The pain is there. What I am sure of is that this void will be filled by next cycle.

The void of the “big 3” (Doodles, Moonbirds, Clone X) will eventually be filled by a dark horse community. The same way many influencers (owing these projects mentioned above) shouted on twitter to avoid buying “scams” like Pudgy Penguins and Azuki – they were too lazy to peak under the hood and take a look into the communities cultivated here.

Of course, this will happen again, and no current “blue chip” remains safe. Not even Yuga. I’ve mentioned in the past but if I’m looking for a project to fill the void it’s Captainz, Overlord, Miladys, and Kanpai Pandas. I am extremely confident 1-2 of these enter “Blue Chip” territory in the next 6-8 months, and another 1-2 projects I’m completely missing here should do this as well.

I’m also confident this will be quite the unpopular newsletter as it comes off as me saying a lot of the popular projects of the past aren’t worth getting involved in. This is exactly what I’m saying, and have been since around October at this point.

Anyways, thats enough of that for one newsletter. I think a huge takeaway here is that people who own expensive jpegs are in no rush to sell and are not as “down bad” as the mainstream media things. As long as monkey pictures are over 100k, it’s tough to discuss the death of NFTs with a straight face.

Speaking of death of NFTs, we now see Facebook (refuse to call them Meta) winding down their “digital collectible” initiative. I remember thinking how bullish this was when it was first announced but I now realize this was foolish of me.

Big corporations are almost always late to the party. Instead of thinking something like Instagram would bring NFTs to the masses, it acted more as a top signal for this cycle. Facebook or social media is never going to make digital collectibles cool. What made them cool in the first place was things like Fortnite and niche online communities. I think the above news by Facebook is something of a bottom signal if anything. Eventually, these companies will all be back. So will Ryan Carson.

I guess it does make sense to leave now. I mean, I don’t know about you, but this market is still so boring. Yes, I understand there’s always going to be one project every week that does a 10x+ and like 6 people make 10 ETH and tweet about it, but other than that there is seriously nothing going on.

There’s no new mints, very little news from big projects, and as the weather warms up more and more people are starting to venture into the unknown (outside to touch grass).

This tweet pretty much sums it up.

This proves my point from last week but the market is just the same folks dumping on each other and we’re still in this weird stalemate. It’s easy to blame this on blur, but is that really the case? Remember how nothing was going on in October/November 2023 - this was the exact time to buy. I don’t want to say right now is reminiscent of that as the global financial system collapsing most likely does not align with the ideal of buying cartoon images with zero value.

But at some point, most likely pre-summer, we’ll get another large catalyst in volume. Some projects will make somebody generational wealth, and others will consist of founders who you said to “never fade” and this will only disappoint you.

What I do hope, is that when I am writing to you all next week, I have made some jpeg purchases. I am very bored and would like the casino to turn back on. I find it way more enjoyable to buy pictures of cute animals than buy bitcoin to hedge global uncertainty, but it looks like it’s another week of Bitcoin for me. Sigh. Until I feel cozy accumulating pictures again, I will actually be enjoying the real world. Lame right?

Cheers,
Wilson