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Gm everyone. We just did our lowest “USD” volume week of 2022 but the market this week felt far from “dead” – theres a ton to cover. From the outside looking in, you’ll see that not a single project in the OS top 100 on Monday morning EST has done 400 ETH vol in a 24-hour period. Quite sad. But, if you’ve been sticking around and showing up every day, you’re probably having a somewhat decent October as plenty of opportunities have shown up in these last 2.5 weeks. Oh, and did we mention Anthony Hopkins released an NFT collection? A lot to cover, so let’s dive in.
NFTs In The News
Dragonfly and OpenSea back $10 million raise for NFT financing firm MetaStreet
Budweiser turns scoreboards into NFTs for FIFA World Cup
Magic Eden Flip-Flops on Solana NFT Royalties, Making Them Optional
NFT Infrastructure Company Gomu Closes $5M Seed Round
Brevan Howard and Morgan Creek lead web3 gaming startup's $40 million Series A: Bloomberg
Konami plots NFT, web3 and metaverse hiring spree
NFT startup Otterspace raises $3.7 million to 'definancialize web3': Exclusive
Fidelity reveals Ethereum index fund with $5,000,000 in sales in new filing
Quick Market Update
Sunday October 16th was the lowest daily volume for OS at $8.1 million USD. It seems like ages ago when a hyped project like Ragnarok or PXN would do more than $8 million of volume just on their mints. Overall ETH trading volume was down week-over-week but still higher than the lows we saw the week of Sep 19th.
We’re continuing to fall deeper into the “exhaustion” phase of the bear market and we have very few new entrants coming to buy our bags at this point. Lucky for us jpeg traders, we’ve been bailed out by the fact that ETH has been experiencing a lack of volatility for the last 4 weeks. With ETH consistent in the $1200-$1400 range, we’ve seen a decent rebound in mid-cap projects as well as newer mints able to grind up post-mint / reveal, rather than a quick pump and die.
With little to cover this week in the NFT *macro*, there’s still a ton of narratives that are solidifying themselves throughout the space, so we’ll dive deeper into these for this specific newsletter. Overall, the ability to be patient and wait on the sidelines as well as not marrying any bags has been the winning strategy this entire bear market. Doesn’t look to be changing anytime soon.
Blue Chips
The 3rd week in a row where blue chip PFPs continue to have low volume. Whereas we used to see these projects consistently in the top 10 on OS, we’re lucky to see even 2 or 3 at a time now.
Monkey pictures and mutants are trending down slightly week-over-week but nothing too notable considering that the founders of BAYC are under investigation from the SEC. As we mentioned last week, these assets continue to consolidate, either forming some sort of medium-term bottom or gearing up for the next leg down.
We have Moonbirds and Doodles back under their 10 ETH and 8 ETH floors, namely due to low volume under-cutters. While both of these projects have shown relative strength for the first half of the bear market, Clone X and Azuki have taken over as the attention-grabbers now. Azuki looks strong back above 11 ETH off the back of a ton of recent announcements. Notable about Azuki is that they handle FUD better than anyone could imagine, it’s very impressive. Clone X and Azuki are also seeing some rare sales 3-4x above the floor.
We’ll add Cool Cats back to the mix for now as they’re head-to-head with Pudgies. Cool Cats retraced their pump from 3.4 back to sub 3 ETH but are 30%+ from their bottom at this point. Pudgy Penguins were able to stay flat week-over-week at 2.8-2.9 ETH on higher volume, but not enough to outpace the undercutting. However, we did see the first ever NFT meme used by a US senator, and of course it was a Penguin.
Now that you’re all caught up, we can dive into all of the stories this week.
Last Week In Review
Last week we discussed paid mints being back. The next trend we’re seeing is that new mints in general aren’t always quick 24-hour flips anymore; they may grind up for a week or two. Helix grinded up to .35 this week after spending most of the week post-mint around .2. We’ll be watching for this trend as we play projects like Degenheim this week, which we expect will be highly successful.
Circling back to paid mints thriving once again, let's talk about how to determine whether a project is suspicious so you don’t get lured in. We’re finding that many new projects that haven’t minted yet have over 100k+ followers. From last week; “Having a high level of skepticism when doing analysis is very important in this space and follower/discord member count certainly does not solely indicate whether a project will be successful. As a matter of fact, most of the successful new mints are in the 20-50k follower range, with very few above 80k.” We’re now pretty confident that suspiciously large followings are a red flag. Overborne with 140k followers didn’t even mint out 15% before cutting its supply down to 2,222 out of 10,000.
How does this work exactly? The new trend is that many of these projects will use alphabot which will force you to follow, like, and RT just to enter a WL giveaway which is driving *fake engagement* ultimately creating a facade of hype. Nothing against alphabot btw, it’s a great tool, but projects will take advantage of it to force engagement. The most hyped new mints upcoming are Valhalla, KPR, and Terrapin Genesis, all with max 40k followers. As the paid mint meta returns, you’ll see many projects on twitter with few tweets and 100k+ followers that seem mysterious and exclusive, be *skeptical* of these.
Avax Finding Its Groove
Adding to paid mints, let’s discuss AVAX NFTs. AVAX NFTs are on fire and nobody is talking about them. There were a few weeks back in June/July where we saw a bunch of AVAX NFT projects mint out in under 5 min and do well. Then this sort of faded for a bit, but if you were accumulating in Aug/Sep you’re probably quite thrilled. Projects like Peons are a 20x from mint and Chad Doge is a 6x off the bottom. Practically every project that minted over the summer is up meaningfully from mint.
Wolfi Land minted out in under 10 seconds and within its 24 hour pre-reveal period had done a ~12x it’s mint price. A solid win for sure and is sitting at a cozy 8x from mint a few days later. A ton of profits from this project are also rolling back into the ecosystem. It may be too late to be “early” to SOL NFTs, but we don’t feel this way about AVAX. A top 10 rare Wolfi sold for 300 AVAX (a 240x from mint price in just 4 day) which isn’t something to ignore. We’ll watch this area very closely in the coming weeks. Right now, Ogerz seems to be the next big project with hype.
Fine Digital Art
Next up let's talk about the art world. Digital art has been holding up very well throughout the bear market. Squiggles are above 12 ETH, Fidenza's are still selling at 100 ETH+, and we saw the craziness with QQL. It’s always a bit tough to find the next hot art project vs your typical PFP. As far as new mints go, the project Miuzium looks promising. It’s a 1001 1/1 art collection from various artists. Worth keeping on your radar as fine art NFT projects have been outperforming during this bear.
Volume
Volume, volume, volume. We’re seeing various projects that can maintain consistent volume for sustained periods of time which is ultra rare in this space. Let’s use Genuine Undead as an example, which has gone from .01 to now a .8 ETH floor over the last 2 months with little to no news outside a strong community on twitter. However, this wasn’t a straight shot up, and was more of a slow grind. Genuine Undead ranged from .15 to .25 for around a full month. That being said, the entire time since Genuine Undead minted, it has practically always in the top 50 on OS total volume, and seems to be trending every other day for the last month. These projects with sustained volume for long periods of time tend to grind up, and you usually have more than enough time to enter a position. Eventually, they seem to take a big parabolic leg up, before retracing the move to a lower area of consolidation. This has played out with Kitaro and Gangster All Star also.
Royalties
Moving on, the platform wars continue to play out with Magic Eden announcing optional royalties. By 2023 we expect that the majority of marketplaces will implement optional royalties and many collections will have their own collection-specific marketplace. In turn, this should also force projects to think like real businesses and develop new revenue streams outside of royalty revenue.
Digidaigaku is still at a 13 ETH floor and the announcements will simply not go away. At this point, if you’re still fading Gabriel Leydon we don’t know what to tell you. When you’re watching Super Bowl 2023 you will now see the Digi’s on the big screen. We live in the greatest timeline.
Conclusion
With the AVAX boom last week and paid mints turning into solid wins, October has been a fun month. A few paid mints going on but for the most part should be another low-volume week, similar to the last few. Hopefully, hyped mints like Valhalla bring some more liquidity back to the market in the coming weeks.
Finally, if you take a look at our News section, a ton of money is still flowing into the web3 space. Persistence will pay off. Good luck, have fun.
Until next week,
MM Team