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"My NFT just 10x’ed! Soon I’ll be a millionaire!"
Did you take into consideration Solana falling in price?
Where are we in the NFT investing game, and how can you approach NFTs as an investor in such a tough market?
Let’s dive into NFTs as a long-term store of value.
First, what exactly are NFTs?
Well today, these can be defined as smart contracts that verify ownership of something digitally. Jpegs like art, and music and other artistic things, are at the NFT forefront.
Tomorrow, NFTs could be Real Estate contracts, hospital codes, alerts, tickets, or verification methods. The potential uses are as expansive as the technology within the sector.
Even Mark Cuban is offering Mavericks tickets as NFTs right now:
As simple as this may seem, this is the future.
Let’s tie this in with the bear market we are supposedly in,...
What defines a bear market in the NFT space?
Well, unless you were here in 2013 and 2017—which most of us weren’t—we have no idea. The early days of Cryptopunks and Crypto kitties are long gone, and that was a different market altogether. All we can point to is the crypto bear markets of those years and what happened during and after, when the bull returned.
As we can see from this chart, 80% retracements defined bear markets in Bitcoin for 2-3 year periods until reclaiming all time highs. Following a rough 4-year cycle, if we are truly in a bear, we won’t see new all time highs in $BTC until as early as 2024. However, this doesn’t mean we won’t see short term profitable runs. We will more likely have to find a bottom, go sideways further, before we get a full on uptrend going. For altcoins such as $ETH, $SOL they are also down 65% and 80% respectively, so we have some ways to go, and $BTC will lead us there.
Using this information, we can smell a bottom getting ever closer, but that doesn’t mean the downtrend is over. What it does mean though, is that we are increasing the risk-reward ratio, as we are potentially near a “bottom”.
...as well as the buildoooOOOr meta.
In long-term aspects, the buildoooOOOrr meta couldn’t have come at a better time. We are having the ability to invest in projects, that could be the next Apple or Amazon, early on. We will most likely see the most hyperbolic growth over the next 3-5 years. Would you rather buy Apple stock at $5 in the 2000’s, or after it’s pumped to the hundreds?
Given this, why then does this cause Solflation? Well, as a word I just created I'll supply the definition.
Solflation is a short term valuation in an asset that has exponential upside reward, with minimal downside risk. Following the math that $SOL is already down 80% from its ATHs at $260, it could drop another $20 and be in the teens, where it should find some support. That is simply a 40-50% drop, But the NFT flipping game we degens are playing can come in the form of 100-200% moves very easily.
So, valuing your assets long-term could be looked at as stacking $SOL. By this stance, if you 10-20x your bag, in today’s USD equivalent that is not very substantial and could be at a loss. However, at ATH’s, multiply that bag by a 10x, or on $ETH’s growth curve after it retraced 90% in 2018, a 52x move.
Referencing these images from $ETH after its first major bull run, comparatively to $SOL, there are quite a few hopeful scenarios.
I say this simply to give a reminder that wealth is built in the bear. I am personally not a seller at these low of levels, but plan to hold 3-5 years minimum. Plan your trade, trade your plan and remember, never invest more than you’re willing to lose.