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Reports Of My Death Are Greatly Exaggerated
We Are So Back
(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.)
Good morning to the 17 people left trading NFTs. For those who celebrated Thanksgiving last week, we hope you all enjoyed the time with your family. Hopefully you didn’t get too much slack for shilling ETH to your parents at the pico top. New updates regarding the FTX contagion continue to come out daily, but us NFT folks are simply *built different*. Built differently you say? Well, $70,000 for a monkey picture must’ve seemed cheap, so we were out there buying the dip all last week. It’s amazing how well our magic internet pictures are holding up compared to our magic internet coins. All things relative, jpegs (the ones left standing) had a decent recovery over the last week. Who would have thought? Let’s dive in.
NFTs In The News
Market Update
Outside of mints, overall trading volume actually ticked up this week. This is a bit misleading due to the heavy volume of BAYC and other Yuga assets but nonetheless, better than a down week. Everyone is speculating what the trial will be and this seems to be driving the hype.
Notably, blur is continuing to eat away at OpenSea’s market share after remaining at about 20% for the last 2 weeks (Blur did more volume than Opensea over thanksgiving weekend). Since royalties hamstring liquidity, blur’s optional royalty feature along with upcoming airdrop have been propelling the exchange to the top at extraordinary speed.
Most of the top 50 collections on blur are in the green week-over-week and despite the gloomy macro environment and FTX debacle we had ourselves a decent 7 days. New mints like Homa are holding up nicely and y00ts continue to be the saving grace for solana.Despite November being the month where we’ve all been farming the blur airdrop, the FTX incident has just overshadowed a lot of this space. As 2022 comes to a close soon we’re all hoping for brighter days ahead. December can go either way, so hold on tight.Blue Chips:It was a good week for the few remaining characters left in this space. Yuga assets have staged a remarkable comeback over the past 2 weeks and a rising tide lifts all ships. Every *blue chip* PFP is up week over week and we also saw a ton of big buys and sweeps this week across almost all of these collections. As always, the floor is on blur.
BAYC dip buyers are getting the last laugh, once again. Every time FUD begins to swirl around Yuga seems to work out for a short/medium-term trade. The Apes are up roughly 20% week/week back to ~66 ETH after selling for sub 50 ETH only 2 weeks ago. Mutants are up almost 30% and back above 13. Monkey land is roughly flat but continues to maintain solid volume. Apes also flipped Punks again this week, which right now are sitting at a 65 ETH floor. Punks are basically a 65 ETH stablecoin at this point so we’ll see how this pans out next week.
Moonbirds, Doodles, Azuki, and Clone X all caught a bid this week. They were much higher over the weekend but have toned down a bit since then. Moonbirds had a big comeback and are back above 7 ETH this week. Doodles are also back above 7, but the birds are still putting up a fight against being flipped. It does help that somebody swept 23 Moonbirds at the bottom. Will be interesting to see how this ages.
Clone X is flat which is quite surprising since it’s been showing a ton of relative strength. Still, Clones are starting to solidify themselves more and more every week they hold ~1 ETH or more above Doodles/Moonbirds. Speaking of strength, Zagabond and the team at Azuki once again continue to hold steady. Azuki’s have easily dealt with the most FUD outside of any blue chip PFP (ok maybe Penguins) and refuse to lose their seat as the #3 10K PFP. Back above 10 ETH, the people simply like the azuki’s.
Cool Cats haven’t done much and are still below 2 ETH. Technically, they’re still up week/week though. While it’s tough not to love the Cool Cats art and respect it as a historical collection, they’re certainly struggling. Penguins on the other hand finally broke above 3 ETH (yes, we know that there is 1 penguin at 2.88 on blur that’s been there forever since it’s flagged). We saw a 65 ETH sweep for penguins this week and Cole’s (original founder) old Penguin currently has a $14,000 (~12 ETH) bid in the sothebys auction. With a thin floor, it seems that Pudgies may *finally* start to get the momentum back they haven’t seen since early August.
Overall, while things do *feel better* right now, let’s not forget where we are overall. We all still denominate in ETH…right?
Last Week In Review
We’re all waiting for our blur airdrop in hopes of some sort of recovery in 2023. Until then, patience and liquidity seems to be the smart move (if you’re even still here).There’s still a few hyped mints on the horizon (list from last week) but if you don’t have a white list spot, it’s tough to want to get involved after seeing how KPR and even the way Valhalla is trending pre-reveal (down 50% from ATH). To us, there doesn’t seem to be many projects that are actually building something cool and unique, most just have sleek websites that say a bunch of words with no “real” roadmap. Outside of Lost Realms and Miuzium (digital art), most of the hyped mints to us are just opportunities for a *very quick flip*. On the bright side, white list farming is easier now with nobody left. With Art Basel around the corner, we’ll see how down-bad everyone truly is, or if they in fact did off ramp some jpeg money to fiat. While everyone on NFT twitter is overly confident that we’ll get some sort of mini-bull run in January after the blur airdrop (we’ll discuss later next month), nobody really has a sense of what will happen in December. On one hand, things may remain slow as there’s no more airdrop farming and people go on vacation, take off from work, and relax. On the other hand, we’ve seen NFTs thrive in environments where people take time off from the “real world” like during Covid. The first real bear market sentiment from NFTs took place from Oct - Dec 2021 and recovered with insane strength from Jan - April, which was the peak mania for NFTs. While those 3 months absolutely pale in comparison to the real bear market we’re going through now, it would be funny to see things play out in a similar way in the new year. We’ve also yet to see ETH stay below $1,000 for a prolonged period of time – if this happens then we’d expect to see another “Degen season for NFTs”. Of course, we don’t have a crystal ball.
For now, it seems that we’re hanging around the bottom (in terms of sentiment). It’s embarrassing to tell anyone in the real world you own an NFT. Most of our IRL friends already think BAYCs are worth nothing and anyone whose still spending every day in discord checking OpenSea is too mentally ill at this point to leave (joking, sort of). How long we’ll stay depressed down here, that’s the million dollar question.
Conclusion
With the slow down in market mania it’s been a bit easier to reflect and focus on the big picture, so we’ll pull from past commentary to underscore our unwavering thoughts on the space as a whole.
NFT technology isn’t going anywhere despite how many times CNBC and Jim Cramer proclaim the “end of crypto”. Just this week, JP Morgan registered a new trademark for a new cryptocurrency bubble.
At the peak of the ICO bubble, we saw plenty of VCs and celebrities jumping aboard the hype train – but as the ICO market fizzled, these so-called ‘institutions’ ran directly for the exit. While NFTs are certainly down bad, we’re seeing a ton of capital and traditional players quietly slither their way into the market.
With most discords dead it’s easier now to find the true believers, builders, and communities that will be here to weather the storm.
“If you bought the blood from the FTX news last week, you’re sitting nicely. If you missed it, this will probably not be the last time to make some high conviction risky buys. There’s still plenty of garbage collections out there that are not zero yet, so we still have a long way to go.”
This is from last week and continued to play out again. While we never recommend buying or selling anything, especially a high-risk internet picture with *zero* utility, patience followed by a little bit of conviction has played out well so far in this bear market. If you’re still here, what is it going to take for you to leave at this point? Just make sure you don’t fall into the trap of vibing with a “diamond handed” community, as these folks are simply holding their bags to 0.
Have a great week!MM