Update: It's Still Getting Worse

📉🙏📈

November 22, 2022

(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 and good morrow. Another rough week for crypto twitter and our fiat denominated net worth. How does this all feel? Not good. Really not good. Remember this feeling, because this is what the depths of a bear market feel like, and we are certainly in it. Well it’s not all doom and gloom. We had a few successful new mints this week and the blue chips had a nice recovery from the death spiral downwards last week. Who would have thought that our cute pictures would hold up better than our fake internet coins with no pictures? As the contagion spreads, there’s still tons of rumors out there driving FUD and by the time you’re reading this there may already be another collapse. Never a dull day. We’re still here, alive [barely], but determined to bring you some value as you drink your morning coffee or afternoon tea. It’s gonna be a big week.

NFTs In The News

Market Update

Congratulations, you’re officially 1 week away from making it through 6 months of an NFT bear market. Unsurprisingly, things remain relatively unchanged, now back at another 2022 yearly low for weekly OpenSea volume. Also, since inception, it looks like blur has settled in the 15-20% of volume range, showing OpenSea still has its moat (for now).

ETH has also broken below its $1,100 resistance. Last time ETH settled in this area we had our major degen season with goblintown and WAGDIE. This feels like years ago right? If ETH can break its $1,000 resistance and hold this area, then NFTs will get really interesting. Prediction: If ETH goes below $1000 for some time: NFTs will drop in ETH terms quickly off of more contagion FUD. People will accept lowball wETH bids and look to cash out their ETH to stables/fiat. After ETH settles in a lower range NFTs (especially blue chips and high-end art) will lead a quick recovery.Let’s use Y00ts as an example. When Sol crashed from $30+ to sub $17, y00ts tanked from 70 Sol to sub 40 sol and went back to 70 Sol within a 48-hour period. Now Sol has settled around $12, y00ts are 110 Sol which is close to their ATH (still down bad in USD). If you’re a long term ETH bull, then another 10-20% down in prices may present a great opportunity to stack your Vitalik coins.

Ultimately, as seemingly everything collapses around us, it feels a bit strange to be solely focused on NFTs. That being said, if you’re holding the right alt coins with pictures, then you’re down *less bad* than many fungible token holders.

Blue Chips:

This was a great week for the *blue chip* PFPs with the crazy degens stepping in to buy the blood, in of course degenerate fashion. It’s pretty amazing that even in the darkest hours, big buyers are stepping in and wearing their conviction on their sleeve.

Apes had a nice recovery – with some sales below 50 ETH last week, the floor is back to 56 ETH. Still well under $100k as ETH continues to crater but this is a 10%+ recovery. Mutants catching a bid as well and are back above 10 ETH on solid *relative* volume. While not a blue chip PFP, the monkey land is up 40% back above 1 ETH after we saw some capitulation last week. Yuga isn’t impervious to FUD, but they surely put up a good fight. Oh, and don’t forget about this 613 ETH ape sale as well.

Our next batch had quite a varied week. Doodles made a nice 1 ETH recovery and are back above 6, although still has the lowest volume of the group here. Clones also had a big week, jumping 10% and reclaiming their 8 ETH floor. Both of these projects found plenty of willing buyers through the carnage. Moonbirds on the other hand continue to struggle, and are down to 6.8 ETH looking like a ticking time bomb for Doodles to flip as they’re the only high-profile PFP to not trend up week-over-week. We’d expect this to be more of a downward catalyst for MBs than upward for Doodles, since they’re essentially the same “tier” at this point. Finally, Azuki’s continue to look solid holding strongly above 9. Notably, Azuki continues to command multiple 100 ETH+ sales even in this market.

Cool Cats recovered slightly but are still struggling to hold above that 2 ETH floor. As the once solid #3 project, there’s been little good news about the cats in quite some time. Overall, think their success is a net positive for the space, but it seems like they’re hanging by a thread. On the other hand Penguins had themselves a solid week. Floor price jumped over 25% week-over-week and 10 rare penguins will be auctioned off at Sothebys. The most notable thing about the pengs continues to be that a large volume of sales are well above the floor price, as people buy the pengs they enjoy. This doesn’t help the floor as much as we’d like as it’s full of the same 5-7 undercutters (with less desirable penguins) but overall they’re holding strong around 2.8 ETH. Also the rare penguin market continues to be a different animal, with rare sales at the highest premium compared to floor outside of every project except Punks.

And of course, throughout all the madness Punks remain flat week-over-week. Quite remarkable and the true veblen good. 

Last Week In Review & Musings

Plenty of projects are still building and it’s quite amazing to see some that have survived for so long and continue to grind. Cryptowalkers, a low key project we mentioned around a year ago, never really had exciting price action or got in the news. Last week, they released this awesome trailer building out a p2e game and the floor jumped 50%. Also, the infamous Mekaverse dropped another amazing trailer for some sort of game, giving a slight boost in floor price as well. While Mekaverse specifically is down tremendously, it’s cool to watch these projects build in the bear and seemingly come back from the dead. Some hopium still left.

We also saw new mints have their best week in quite some time. Cel Mates sold out their collection at .33 ETH with ease and even hit a .7 ETH floor price shortly after. 1984 and Homa Gang also brought some decent volume back and have been cooking post mint. As always, it’s tough to determine the long term viability of new mints but the fact that the consensus *higher quality* projects are selling out paid mints at the worst possible time in the bear market is somewhat reassuring. As long as there are opportunities for a 2x in under an hour, the degens aren’t going anywhere.

Valhalla, one of the most hyped projects of Q4, mints tomorrow with a .5 ETH mint price. While we think long-term this has the same fate as KPR (1 ETH to .2 post-reveal) this is certainly going to be exciting to watch and we expect tons of volume. Still some big new mints on the horizon to keep an out for:

Slow week, especially if you were not partaking in the new mints going on. 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. Luckily, it’s much easier to sift through the madness and spot high quality when the market has been brutalized. 

Conclusion

Things still suck. They suck a lot. But it’s now been ~1 year of a crypto bear market and ~6 months of down-only in NFTs. If you made it to the end of the newsletter, why would you bother giving up now? Sure, we have a long road ahead of us. But when things come back, are you going to be early or are you just a tourist?Stay safe out there. If you’re in the US, have a lovely thanksgiving with your families.Cheers,

MM