Cognitive Dissonance.
I recently had a conversation with my girlfriend when she told me, “remember how you bought that JPEG and joked about it?”
That collection was Hashmasks. Me and Alex (our former Senior Researcher) bought them during the public sale for 0.3 ETH. I sold mine for 0.6 ETH, and soon after, it went well over 1 ETH. Now the floor is 0.38 ETH.
Why am I telling you this? I recently aped in Akutars, a collection that suffered from an exploit and failed due to a poorly coded contract. Due to Akutars’ developers’ incompetence, more than 11,000 ETH were lost forever. Looking at this failure in real-time, I said goodbye to my ETH.
After the sale, I monitored the project’s Twitter pretty heavily because, for some reason, moderators thought it was a good idea to lock Discord. Thousands of people couldn’t get information about the project after it lost millions of dollars. What I saw in Twitter responses made me feel like I was in a mental institution.
Over $30 million evaporated, but the community was largely sympathetic towards the team. Why did it bother me? The team received reports about vulnerabilities, but they claimed these vulnerabilities were actually “FEATURES.” The team was arrogant, which led to huge losses, yet the community didn’t mind and praised them.
Shortly after the debacle, NFTs went live, and whoever wanted had plenty of time to profit off them because they’ve been trading above the initial sale’s price for several hours. The floor is still not far from this price of 2.1 ETH, even though the project just lost millions of dollars.
Tying this to the Hashmasks sale, I will still joke about NFTs any day. I don’t mind playing this game, but the recent observations made me think hard about how to approach it.
And I wasn’t the only one to notice this. Our chief farmer Sergey recently told me, “I think the NFT market decoupled from crypto. And then I encountered this thread pointing out how NFTs can make you feel like you’re in a bad dream.
Probably NFT degeneracy is a supercharged version of general crypto degeneracy. Nobody cares about the underlying processes and always looks for the next shiny thing. Does it sound like the infamous ICO era to you?
Yet, I don’t believe the market will have as bad of a bear market as the last one. It may be long but not as severe because there’s much more liquidity in the system now. Plus, there’s much better diversification in terms of possible activities: DeFi, gaming, collectibles.
I believe the most productive thing to learn here is not to focus on whether something is good but on whether the market’s participants will think it’s good.
It may not be a revelation after reading a much better-written post from Cobie, but sometimes you need ideas to be drilled down your head for them to be able to change your mindset. I hope today I helped you look at the market from a different angle again.
SIMETRI Portfolio – Sideways
While $BTC is moving near $40,000, the portfolio will likely remain largely stagnant.
