Huge NFT Update | how to play the current market
Hey guys so i had another video planned For today but it’d be weird to ignore What’s actually happening in the market And so i’m changing it up i know a lot Of you are probably looking at your nfts Being down right now and thinking oh my God why did i ever buy this or maybe You’re on the sidelines and thinking This might be a good time to buy in and If so what should you buy so that’s what We’re gonna get into today and i’m gonna Tell you how i’m playing the situation And what i’m personally buying into well First let’s take a look at the market Today and keep in mind that things might Change by the time this video goes out It already looks like things are Bouncing back a bit but i don’t think We’re out of the woods yet and anyways This is gonna be some general advice That could be useful whenever things go South in the future okay so looking at The numbers right now we can see that Most collections are down double digits Some as much as 25 to 30 percent and Only a few nfts are actually up right Now this is kind of weird to see in Comparison to the invisible friends drop That happened just a few hours earlier Which was easily the most hyped drop We’ve ever had in the nft space but a Day later invisible friends is also down Big time from its initial peak so in a Way it feels like we went from this
Party atmosphere to almost a complete Dead stop overnight but actually this Drop off comes after a period of Declining nft volume starting in early February after an insane bull run in January and nfts aren’t alone right We’re also seeing these declines in Stocks as well as crypto which is also Down double digits so this tension has Been in the market for a while okay First with fears around rising interest Rates and the long-term debt cycle in General and now with geopolitical Tensions and an actual war in eastern Europe for most of us this situation is Unprecedented and things can get a lot Worse than we’ve seen in maybe a hundred Years and so regardless of what you’re Investing in you can’t really point to Your own experience but we can look at How investors reacted in the past during Similar dark times even if they’re not Going to be as significant as what we Might see today and so the first Question we might ask is how do stocks Perform during a war because we probably Have more data on that than any other Asset class and the answer seems to be Not as bad as you think if we see in This tweet the invasion or the beginning Of wars tend to shock markets and leads To a drop but then it picks up shortly After we can see this during the vietnam War the gulf war iraq war and so on in
Other words generally speaking invasions Mark bottoms although the current Situation could get much worse than any Of these other wars now guys in no way Am i saying that you should feel happy Or bullish because there’s you know an Invasion related dip or something like That obviously what’s happening right Now is incredibly sad it goes way beyond Markets and there are many people out There that have bigger things on their Mind but this type of information is Useful for people who plan on staying in The markets anyways and just need to Know how to navigate everything it seems Like the right move would have been to Buy the dip in the past but of course You can’t say that across the board Might be true for some stocks not for Others because the impact is felt Differently across different industries And anyways we’re focusing on nfts and Nfts aren’t stocks okay you know in most Cases there aren’t any cash flows and You don’t have ownership of any Underlying assets other than an image And maybe some intellectual property Rights instead we would say that nfts Fall under the bucket of discretionary Spending for some people their access to Social clubs for others they’re Collectible items or art investments and For some it’s just closer to gambling Either way nobody’s considering them to
Be essential goods and so maybe a better Question is how does art perform during A war and well a paper by nyu professors Zhang ping may and michael moses Actually looked at this and the results Were kind of surprising so looking at Some examples of recent wars during World war ii stock markets in london and New york plunged then recovered by 1946 To 107 and 100 of their 1937 levels While art outperformed and rose to 130 Percent of its 1937 level then we have The s p 500 increasing 67 percent during The korean war while the art index was Up 108 and more recently the s p 500 Decreased 27 from 1966 to 1975 during The vietnam war whereas art actually Increased 256 percent so they conclude That during the armed conflicts of Lengthy duration of the last century our Indexes outperformed major stock indexes Alright so the art market seems to do Okay but again it’s hard to compare fine Art to nfts because one the demographics Of the buyers are very different and two Because the goals that people have when They’re buying nfts are also going to be Way different than you know the Traditional collector when they’re Buying fine art and okay maybe like 6529 Says you can compare blue chip art block Nfts to traditional art because they’re Bought by ultra rich people who really Don’t care about earning a profit i mean
If you spend 2100 eath on an nft you’re Probably not too worried about this but That’s just not the case for 99 of us Okay for the majority of us flipping is An important part of nfts whereas fine Art is expected to be a much more Long-term and a liquid asset another Difference is that because nfts are more Liquid than are then real-time prices Are gonna be more readily available and That’s gonna play much more into market Psychology so let’s talk about that for A second to put it simply nft sku very Young and inexperienced much more than Any other market of the size that i can Think of and this makes it very hard to Predict what these buyers are gonna Think and do on one hand you have a lot Of buyers who have never experienced a Real bear market and so when things get Tough they might panic more than the Seasoned veterans people might start Asking themselves why didn’t i sell the Top or they’ll start looking at their Jpegs and they might start thinking oh My god was this whole thing idiotic were The critics right this kind of doubt Exists with all investments okay people Have written entire books on market Psychology but when you have something This new and controversial like nfts Then that kind of cell doubt gets put on Steroids there’s also the fact that nfts Are coming off their biggest micro bull
Run from january okay that was the best Month ever for the space and according To open c the number of buyers have Basically doubled since early november This means that a lot of people in nfts Haven’t even seen a correction let alone A prolonged dark mega bear on the other Hand maybe these new buyers don’t have Those biases that we see with Sophisticated investors okay maybe They’re not trying to optimize resource Allocations maybe they’re not hedging And they just keep on buying pretty Jpegs i think that’s possible but you Can probably expect things to get worse Okay if these sanctions start affecting The general economy then liquidity Drives off people take their money away From risky assets and we might not see That easy money that has been flowing Into the system until now i’m not gonna Lie i don’t know the answer here but the Way i see it you have three options okay You can do more do less or do nothing i Know groundbreaking stuff but let’s go Through them so number one if you choose To do more then maybe you just start Buying a lot more nfts because you think This is an over correction there’s a Certain type of investor that does well Whenever there’s fear in the market and Maybe that’s you and it’s possible that This might be your chance to buy that Nft you wanted at a discount okay
Azuki’s down below 10 eth right now and Then bomb squads that point six each Capsules down below one i’m not saying Those are the ones you should buy i’m Just using them as examples to show you How far things have dropped it’s not Like these brands just stop building Overnight okay and the only potential Impact that i can see here is if they Rely heavily on secondary royalties to Maintain the team and operations and the Royalties dry up then that could cause Some complications so i do recommend Checking in on the financial situation Of whatever collection you’re in and Just ask them you know what’s the Treasury wallet and just check in on the Balance but aside from that if you Originally bought in because you thought These were quality brands and that you Know they were building something for The future then not much has changed Just because of today’s price unless Maybe you have money tied up that you Can’t afford to lose now the first Option which is do more can also mean Selling nfts as fast as you can i saw This one piece of advice recently which Is look through what you own and write Down your conviction level next to it Give it a score of low medium or high Your high conviction positions you Should feel comfortable about holding Here if you don’t feel that way then
Your conviction is not high enough Convert all your low medium conviction Positions into your high conviction Positions so that’s one strategy now Option two is do less which is you know You might still be a buyer but you want To see if the price drops to a level That’s too attractive to ignore so You’re sort of playing this game of wait And see and option three is do nothing Okay just go for a walk step away from The market you basically made your bets Now let them ride or if you haven’t Bought in yet then maybe just stay on The sidelines a little longer and just Observe how these communities and Creators react to a potential bear Market i think you can expect the number Of soft rugs to increase when we get a Bear market you know you’re gonna have All these creators who already made Millions of dollars things are getting Tougher it’s just not as fun and they’re Just gonna walk away and so once things Clear up the communities and creators That stayed you can trust that they’re Probably in it for the long run okay so Personally i was a buyer last night i Bought into a mutant ape after it Dropped like 25 in a day and i also have A short list of other entities that i’m Looking at and waiting to see if they Drop to a more attractive level and These are mostly projects that have top
Tier creators that i think are going to Be here for the long term now i Absolutely don’t think i can time the Bottom i don’t think anybody can but i Still have super high conviction in nfts As a category i think the fundamentals Are still very strong and we have Growing adoption in major exchanges Institutions brands and so nothing in The story has changed for me on the Other hand even though i already wasn’t A day trader to begin with i’m even less Likely to do any of that because i do Think things can get worse i think Liquidity can dry up and so i’m really Not messing with any momentum or swing Trades until things clear up anyways Those are my thoughts right now and i Hope that gave you good perspective Outside of the markets i think this is a Good time to reflect on what actually Matters in your life i don’t know where All of you are based but i’m sure some Of you are being more affected by this War than i am and so i hope you guys Feel safe and stay safe thanks again for Watching and i’ll catch you at the next Video
