Finding Yin in the Yang

Finding Yin in the Yang

I’m writing this newsletter to provide a window into some of the craziness of NFTs: the volatility, the work of some up-and-coming digital artists, the degenerates that run through the market, and more. If you’re interested, I would love for you to follow me and subscribe. I plan to create two letters a week, discuss trends and explain some marketplace phenomena. I want to help you find some stability in the volatility, find the Yin in the Yang of the NFT Market.

Recently, family and friends have been asking about Cryptocurrencies and the NFT Market with greater frequency. I see so many people look from outside into the space and cast it off as a black market for JPEGs. Some celebrities relish the community; others denigrate it. It’s hard to tell what’s sustainable or authentic… That can be frustrating. I want to help bring some understanding to those who may not know anything or want to know more! I’m currently a moderator for a project with over 250,000 Twitter followers and somewhere close to $150,000,000 in trade volume. A moderator helps tend to the community in Discord, one of the leading apps used to organize in the space. I’m also an administrator for another project that’s just started and is trying to become a decentralized Sims-style game. I’m net profitable trading, currently at about a 300% return on my portfolio. Highly successful people in the markets surround me, and I want to shed some light on how we all have grown to have success.

Let’s go back to 2021 when NFT’s first exploded and since then have skyrocketed in popularity and some cases, value. I mean, check out the Google Trends for searches over the past year.

NFT stands for “Non-Fungible Token.” Fungibility is the ability to be replicated or replaced by something with the same properties. For instance, Dollar Bills are fungible; if you put $1 into a hat with 99 others, you don’t care what you pull out of the hat as all 100 $1 bills have the same value.

So, what is “non-fungibility”? An NFT is something unique. Nothing can take its place. The NFT’s value and properties are securely stored and verifiable across a decentralized network by being tied to the blockchain. In other words, many computers across the world in real-time are keeping track of transactions across the network. I’ll provide more information on what that means later and if you want a great video explaining blockchain, check out the one below.

NFTs can potentially be on any blockchain system, but some have better optimization and popularity. I will focus on the most well-known and commonly used, Ethereum NFTs. Ethereum is the second-largest cryptocurrency in terms of Market cap. Ethereum’s goal was to develop decentralized applications. NFTs are a happy side effect and product of the blockchain’s potential.

Now that you’ve learned a few new words, let’s talk about the NFT Market. The current state of NFTs I believe likely mirrored the early days of Silicon Valley or the early days of the internet, when small squads and niche communities were pushing the boundaries in fields that no one seemed to understand, except for those immersed in them. Development teams of an artist, a coder and some other Devs could create these items connected to the blockchain that genuinely were just interesting uses of the blockchain…Then attention and potential overwhelmed everything. Now you have experienced techies, Venture Capitalists and, now the public, flooding into the space looking for the next great NFT project. I don’t believe all NFTs are created equal. Check the current state of the market and you’ll see it is oversaturated. Derivative projects, projects that mirror more successful ‘blue chip’ projects, and plain money grabs abound. Any designer and coder can come together to generate a collection of a few thousand NFTs. With that being said, I believe there’s a reason there’s so much value and speculation in the space. Within this market, this minefield of a market, there are genuinely projects that will change our lives as Facebook, Amazon and others have. I’m very much of the opinion that as technology advances, there may be things we don’t understand initially but have the potential to be valuable later. For instance, NFTs don’t make sense when seen at face value, which makes many skeptical, but NFTs will change the digital world over the next few years.

That doesn’t mean I want everyone to invest just because money is being thrown into this niche crypto industry. Many retail investors can see great returns and learn to understand the NFT market with conservative and intelligent investing.

When NFTs became very popular in 2021, they became popular due to a category known as PFP, Profile Picture, or Picture for Proof NFTs. Have you ever heard of CryptoPunks or Bored Ape Yacht Club? Look at some of these queries tied to google.

This is BAYC or Bored Ape Yacht Club. They are the Ape NFT you see referenced in the #1 rankings above.

They started as a simple project where you could buy or “mint” one for a few hundred dollars during their release in April 2021, specifically .08 ETH or around $200 per Ape. Fast forward to a little under a year, and their last sale as of 5:00 PM EST, January 17th, 2022, was for 86.69 Ethereum or close to $280,000. That’s an insane amount of money. The media tend to only show headlines in the space are defined by exponential loss or gain, but the space is one of innovation and artistry. BAYC is an outlier in NFT success. No one can guarantee returns like this regularly, yet many enter the market looking for ridiculous profit and lunge into the first JPEG they like. If you can find stable and safe plays, in a market dictated by swings of volume and hype, you’ll manage to be profitable. I believe everyone can find the Yin in the Yang.