Why I’m selling off NFTs during this bull run

New year’s day is typically a nice Opportunity to spend time with the Family have a little bit of leftovers or Maybe just watch movies while you nurse Your hangover but apparently in the nft Space you guys are a little bit more Aggressive january first kicked off a New bull run that has gone for nearly Two weeks now and prices across many Collections are soaring to the highest Point that we’ve ever seen this is Happening at the same time that crypto Seems to be in free fall with ethereum Down more than 30 percent from early December and there has been an even Bigger drop in nft related tokens like Axe infinity elluvium gala games and Sandbox now to be clear this isn’t the First nft bull run but for many of you Who are newer to the space it might be The first one for you so i want to talk About what i’ve learned from prior bull Runs and how that’s changing the way That i’m approaching this one spoiler Alert i’ve been more of a seller than a Buyer in the last couple of weeks and We’re gonna get into all that but first Let’s talk about what’s driving the Current you know run up in the market so Factor number one is simply an increase In the number of people that are buying Nfts over the last 30 days we broke 200 000 brand new users for the first time And on a percentage basis it’s the

Highest growth we’ve had since early October and even though it’s still early January is on track to have the highest Monthly active users we’ve ever seen on Openc and will probably be the best Month in terms of volume as well in General people are just becoming more Aware of nfts and more recently we’ve Seen an uptick in interest coming from Asia and this was most obvious in the Case of fanta bears which jumped up to a 70th floor in less than 10 days even With a fairly high supply of 10 000 nfts What’s interesting here is that this Collection was made by a taiwanese pop Star and most of the growth is coming From asia which as you probably know is An enormous market for gaming and Collectibles that could just now be Waking up to nfts a second factor to Consider is the decline of markets that Would otherwise be competing for Attention with nfts as we said crypto in General has been down bad in the last Month and at times we’ve seen an inverse Correlation between the price of crypto Going up and down and the prices of nfts Doing the opposite as traders you know Shift their allocations and there is Another benefit to eath or solana Dropping so fast in such a short period Of time and that’s the fact that it Makes it easier for newbies to enter the Market if you consider that eath has

Dropped you know 30 in a month and at The same time mint prices for new Collections have more or less stayed the Same then that just makes it a big Discount for buyers but we’ve also seen A drop-off in meme coins like doge and Shiba which was getting insane volume Around the time that nft prices were Falling off in october and volume has Cooled off in metaverse games like Sandbox which was really peaking a Little over a month ago and some of that Might be transitioning back to Collectibles so as you’ll see in a Minute i think we’ll continue to see These back and forth rotations and it’s Crucial to understand the attention span In the space before you commit yourself To a certain collection for the long Term all right a third factor is the Theory that people were selling a lot of Nfts back in december for the purposes Of tax loss harvesting and this is when You book some losses in order to offset Some of the capital gains that you made During the year anecdotally i know a lot Of people who are doing this and the Theory is reinforced by the fact that if You look at january 1st you know the First day of the year seems to be a big Spike up in the floor prices for a lot Of these collections so it’s possible That these nfts were being artificially Way down as people you know were

Undercutting the floor to meet the Deadline by the end of the year and then One last factor is the rise of genie Swap which is a new tool that people Have been using to buy nfts in batches Instead of going individually one by one On openc so if we look here this is Genie swap and we can just select a Random collection so let me just choose This and then you’re able to just choose A bunch of these nfts and bundle them Together and it’ll buy them for you in One shot and this has three main Benefits so first it’s just a more Efficient way of trading and it allows People to take up large positions Immediately and then second it’s more Gas efficient than buying them Individually one by one and this could Be a big boost for collections that are Priced at a low level where you know gas Prices almost make it not worth buying Into and third it allows famous Collectors to take up a position without Alerting other people since everybody’s Basically watching their wallets and Because of this the volume on gd swap Has been blowing up and they’ve already Generated 125 million dollars in volume Since november so the net result is that We might see large collectors and Institutions feel more comfortable Jumping into the space now that they Have this tool okay so those are the

Main factors that i think have been Driving this bull run but of course you Know there’s a billion little data Points that make up the movements in the Market so it’s certainly not Comprehensive okay now let’s move on to What i think is the most important part Of this video which is that these bull Runs they give you an opportunity to do Spring cleaning which is something that I don’t think most people are doing and It’s something that i don’t think most People even want to hear in other words This could be a great time to take some Profits and cut your losses and i’ll Explain why you see many people take the Fact that we’re still early as a market And they try to use that to justify the Future value of a specific nft but they Actually don’t have anything to do with Each other this is like saying that you Felt confident buying into a specific Internet company in the late 90s because You believe that the internet would Explode when in reality you know it was True that the internet would explode but It was also true that many of those Internet companies would get faded to Absolute zero because they just weren’t Good businesses now if we could invest In the nft space as a whole that would Be ideal but there is no index token That’s just tracking the whole Collectible market there might be in the

Future if we get a decentralized Marketplace that competes with openc and You can just place a bet on that but in The meantime you really only have two Options you either invest in protocols That could turn into big applications as Entities grow so that could be you know Sos or magic or looks rare or you try to Actively pick winners at the collection Level those are your two options and if You actively try to pick collections There’s one thing that you have to Understand almost above everything else And that’s the fact that this market is Driven by hype cycles things that Everyone are obsessed with one day Become absolute trash the next week First you get loot and then everyone Wants a loot copycat then you get wolf Game and everyone wants the next wolf Game it’s a collective add that i don’t Think goes away anytime soon and usually When you have a bull market like this One it’s being driven by two main Categories so you have one the newest Nfts in the latest hype cycle and two The blue chips that have survived from Prior hype cycles because an nft that Goes through multiple cycles and still Has healthy volume shows that there’s Something deeper there and it’s Resilient and that makes people feel More confident in buying in so for Example if we look at the current bull

Market we can see that a lot of the Collections that are pumping are Following this cute art profile pick Style and that’s mostly because doodles Has become a popular brand in the last Couple of months and the qr is a part of Their formula and so what happens you Get alien friends then you get little Lemon friends and then crypto mori’s and Then you get the doodle derivatives one Day i looked at the top 20 collections By volume and i saw doodle apes Caboodles coodles and doodle kongs all In the same day most of these will die Off after a while but with every trend You get one or two that might be worth Holding for the long term and beyond That you’ll have other collections like Border biatclub that you know feel like They’re from a bygone era at this point And yet they’re still pumping and still Surviving another hype cycle which then Further solidifies their position as a Blue chip so one way that i like to Visualize all this is as if we had nft Seasons every season will have a mix of New contenders and the old guard and When the next season starts most of the Prior nfts won’t survive that shift in Attention basically we can just say that They weren’t good enough and there are Some exceptions to this which i’ll talk About at the end now a few collections Do make it through to the next season

And these become more valuable as a Result in my opinion nfts are already Struggling even though we’ve only had One or two seasons are very likely to Completely run out of volume by the time We get to season 10 or 15. because Here’s the rub nfts are only going to Improve from here they literally can Only go up and i can guarantee you that We’ll never have a quality as low as we Did in 2021 that’s not a knock on your Favorite project it’s just the fact that We’ve mostly dealt with the garage band Phase up until now so if a specific Collection is already struggling to rise Above the noise then it’s future’s not Looking so great and this includes many Of the nfts that people were buying back In the summer that are struggling today If i go to nansen and filter all the Collections by starting date and then go To say 200 days ago you’ll start to see A ton of collections that people were Hyped up about that now just have no Volume whatsoever and that’s expected Right if we all understand Intellectually that you know 99 of these Nfts are going to zero then you can’t be Surprised pikachu face when it turns out One of your bets did fall in this 99 Category like we said before there’s a Similarity in what we’re doing here and Angel investing which is when investors You know pour money into a bunch of

Brand new startups fully expecting the Majority of them to fail however one big Difference is that when you put money Into angel investing it becomes illiquid Right and the only way you can get it Back out is if the company gets acquired Or if they go public but with nfts on The other hand you can cut your losses If you realize that you didn’t pick a Winner like you do not have to go all The way to zero and it shouldn’t take Six months or a year to realize this Although many times we can be stubborn And i’ll give you a personal example so Back in the summer i bought a wicked Cranium because it just hit all my Checkboxes at the time and to be honest I think they’ve done you know a good job Innovating with the product and they Release other nfts they brought in Staking much earlier than most Collections and they executed fairly Well on their roadmap but at this point It seems like the market has spoken and They don’t really seem interested in the Brand and the fact that it is benefiting A tiny bit from the most recent bull run Could give you an opportunity to list it And recoup some losses and reinvest this Elsewhere and trust me i’m not trying to Flood this project at all you know the Community could be great right now and Who knows this could blow up down the Road i’m just being transparent with a

Personal strategy that i’m taking and This happens to just be the example that I have for my collections by the way it Should be obvious that we’re speaking Only about nfts from a financial Standpoint right so if you’re buying Into it because of the art or because You want to support the founders or Whatever that’s perfectly fine this is Just for a specific type of buyer so in Essence what i’ve been doing is just Tightening up my portfolio and Specifically i sold a cool cat and a Chromey squiggle and again not flooding These projects at all i actually still Hold a cool cat i just need some Liquidity to try to capitalize on some Of these newer drops because like i said We’re just going to see a barrage of top Quality projects this year and the Advantage that you and i have is you Know people who might have been tracking The space for a while is that we are Going to be able to spot undervalued Collections a lot faster than new people Who are entering the market in 2022. now With that said there are some exceptions To the season’s analogy the first Exception are for projects that are Clearly building something big down the Road so these are going to be more like Those fundraiser projects where people Are funding things that haven’t released Yet which could be a major game or a

Platform of some kind or youtube series Or what have you some of these might Actually be undervalued because the Average nft buyer just doesn’t have the Patience for that and they’re just Looking for something that you know Could be a quick flip so that can Actually be an opportunity the danger Here is that almost every project is you Know working on something that’s part of The roadmap and so you really have to Just be honest in assessing what it is That they’re building and whether you Know the scale of it could be a game Changer for a collection that you know Up until this point might have been Struggling or is it just going to be Another companion nft that nobody cares About or some browser game that is made By people who have no experience in game Development the other category of nfts That can do well here are launch pad Collections because these can sort of Surf over all the hype cycles by getting White lists and free nfts from whatever The latest hot projects are so if you Think the founder is good at business Development and partnerships and they Keep coming up with the goods then this Could be resistant to that season’s Analogy and the last category of course Will be your archaeological nfts so These are going to be your auto glyphs And your curio cards and things like

That these haven’t been pumping recently But they’re based on the objective truth Of the chronological order of when they Came out and i think this is still going To hold value in the future regardless Of what you know the latest trend is Anyways i hope nobody takes any black And white statements from this video i’m Obviously not saying you know sell all Your old nfts that haven’t made you rich All i’m saying is just don’t get married To your bags early on and just be aware Of you know these hype cycles and the Changes in attention and if a certain Collection isn’t doing well across you Know multiple seasons start asking why Because the most likely answer is Probably that you just overestimated That project alright guys that’s enough Tough love for one day thanks for Watching and i’ll catch you the next Video