Summertime Slowdown

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 lovely readers. It’s been roughly two weeks since you’ve heard from me and boy oh boy have we had a ton that’s gone on in that time. Funny enough, if you didn’t look at the charts for the entirety of the time and are specifically looking at price of NFTs only, you wouldn’t realize the insane volatility and emotional price action we saw. As we head into the last week of summer we can reflect on this “NFT Summer” we had. Despite the positivity back in June, everything has practically nuked another 50% since then. Heading into the fall, we are numb to the pain.

Where does this leave us now. To backtrack, we’re ~20 months into the crypto bear market (or ~8 months into a bull, however you want to look at it) and ~15 months into the NFT bear market. In NFT land, we’ve constantly been in a back and forth between the “how much worse can it get” camp to the “how does it keep getting worse”. To many of you, this is no surprise.

Week-over-week declined to the lowest vol all summer, which isn’t too surprising as we’re heading into the slowest weeks of the year. That being said, with blur price nuking and season 2 going on for what feels like forever, most of the big farmers are tired and and liquidity has certainly dried up. We’ll see how the second airdrop goes (if it ever happens) but I’m guessing most of us are expecting that farmers (many with 4 and 5 digit ETH losses) are the biggest losers of the summer.

I have been grinding out this bear market day in and day out. Making money, losing money, making friends, researching, flipping shitcoins, etc. And, it definitely hasn’t been easy. In NFT land, this looks like months of stagnation followed by a big move. This summer, every single one has seemingly failed. Penguins have even pushed their big announcement(s) back in order to not fall into the trap of falling 60% after an announcement.

While I do think market conditions transparently are very bad at the moment, I do understand the reactions. Much of what we heard from DeGods, Azuki, and many other “failed roadmap” projects of the past isn’t really groundbreaking. I mean, owning an NFT just to get more NFTs doesn’t really make sense does it? As we continue to drag out years from the “mania” stage, we laugh about spending tens of thousands of dollars on digital identities. Still, this isn’t preventing those with a bit too much ETH on their hands from making large purchases

While it is summer, let’s remind ourselves that we’re in the thick of this. This feeling is what a true NFT winter feels like. Constant questioning if we’ll ever get another bull market again.

The more I think about it the more I think NFTs are a late cycle phenomenon. Everyone made so much money in DeFi summer, that they started gambling on pictures. Miladys, which have been the best performing asset in the last 3 months can relate to this. Miladys are making/ have made a ton of money in shitcoins, and are rolling those profits back into the eco. Ultimately, NFT season will come back, but it may take some time.

As I’ve preached since the early bear market, in my opinion some sort of web3 gaming mania is what will bring these back. Digital avatars in fortnite and weapon skins in CSGO are extremely popular. Once we get real blockchain games that are actually fun and easy to onboard people to, I’d expect some capital to start slowly pouring back into NFTs. Until then, it will be the same 1,000 of us left dumping on each other. Many web2 companies are taking the leap into web3. Zynga is dropping the very hyped Sugartown in the coming weeks.

I look forward to playing something fun that has some ponzi mechanics to it. I played a lot of runescape growing up and am pumped to see what Sanko Game Corp ends up delivering. Add some ponzi mechanics here and you have a recipe for crypto success.

There’s also some low marketcap browser games I’ve been playing around with. Around 2m. But these are super high-risk / high-reward. I do my best to find the ones that are "addicting” and I look forward to coming back to every day. I still haven’t tried out Parallel yet but have heard great things there as well. Hopefully my dream comes true and we get a web3 plants vs. zombies.

Anyways, that’s all for this week. Transparently I find it harder these last few months to write out long-term perspectives on NFTs. I’ve been grinding in the depths of this crypto winter logging on every day and putting in the work. But as we know, we’re essentially trading attention, and the attention is just not in the jpeg world today. I’ve come to adapt pretty well to the onchain casino, and as long as the “meta” is here, I don’t foresee NFTs making a larger comeback. That being said, there’s times where we’re due for an “obvious” bounce which is what we’ve seen happen over the last few days.

This won’t last IMO and I do think we still have another leg or too down to go. If we keep in mind the late cycle thesis, we still have another ~15 months before this begins. This probably means 5-6 more months of pain, and 9-10 months of low vol where a few projects and “new ideas” (think NBA TopShot) take off and make a small group of people a ton of money. After this happens, we enter easy mode in late 2024/early 2025.

It doesn’t seem like it now, but if you’ve been grinding in the trenches all of 2022 and 2023, you’re most likely going to do quite well when things come back. And yes, crypto markets will bounce back. If you don’t believe they will come back then why are you here?

There’s always kingmaker trades available, just tougher to find. Unlike most, I believe my investments are with good animal pictures, I’m still a loyal community member to Penguins, Creepz, and some other small and newer projects. Ping me on twitter @mintcalwilson if you want to discuss any of this in discord.

That’s all for now. Time to pull up the 5m chart in Dexscreener.

Cheers,
Wilson