In This Issue
- I share my thoughts on the state of the market, doing nothing right now, risk management, are NFT’s dead again & phishing attacks hitting major sites.
- Sam has a report for you on NFT Trends
Premium members also get the following:
- My latest portfolio updates
- Rekt Capital has the latest technical analysis for you on the market.
- Rebecca has all of the latest news for you.
- Upcoming NFT drops
- Defi Dad has a tutorial for you on how to earn up to 48% net APY with USDC on Aurigami Finance on Aurora.
- Jesse has a ton of hot new airdrops for you.
- Hot new token sales.
- Rebecca breaks down this week’s trending coins.
- Jesse has a deep dive for you on Kryxivia.
And much more!
What’s On My Mind by Lark
The State of the Market
Still far from awesome.
We did have a potential capitulation event last week though.
BTC and ETH (61% of the market by value) were oversold on the daily RSI, both hit major zones of price support, and both bounced as buyers stepped up.
We saw major buying take place last week and a big spike of crypto going to exchanges also took place showing a likely moment of capitulation.
The trading volume spike also indicated a possible capitulation event.
That being said, I still feel like we are far from being out of the woods regarding the macro investing scene.
A lot of fear and uncertainty still persist in the equity world, and what happens in equities causes ripples in crypto.
I know that because of the 24 hour nature of the crypto market, the non-stop stream of people posting wins, charts, and panic on social media that there is a constant need to feel the need to be doing something.
Here’s the truth.
You don’t need to.
You can literally just be doing nothing right now.
Assuming you have your bags packed, then you can just be chilling.
Set up your staking, put money into a “safer” defi farm like Bancor, lend on Celsius, or just HODL in your cold wallet and wait.
Sure your bags might be under water, but basically everyone’s investments are under water.
It doesn’t matter what you are investing in.
Stocks are down, metals are down, property is down, crypto is down… it is a bloodbath out there!
But in the vast majority of situations markets recover.
I fully believe we will see new highs for Bitcoin.
The only question is how long it takes.
I suppose it comes down to your time frame as an investor.
If you were here to get rich overnight, then I have some bad news for you.
But if you are here to secure long term financial freedom, then just wait.
The best times are yet to come for crypto.
Also, do always ensure that you have enough cash on hand to ride out any irrationality in the markets.
It may not be sexy, but neither is needing to sell your coins at a loss to get some cash.
PS, do remember that you can take loans versus your coins versus selling them using services like Celsius or Maker Dao.
Personally, I have been buying more Bitcoin and Ethereum, and some little nibbles on some altcoins I like.
But for the most part I am maintaining a strong defensive position with my cash.
I am staking, lending, and farming.
I am still holding most of my altcoin positions.
In many cases these were moon bags anyway.
That being said, I am not afraid to sell coins that I think have largely failed.
But for ones that still have great potential, I am holding.
THAT BEING SAID, there do come times when you need to react and you cannot fully be on auto pilot in crypto.
You still need to pay attention.
Point in case are LUNA and UST.
This was a time to run for the exit doors without delay.
While this is a topic we have discussed many times before, I feel like it is absolutely pertinent to do a refresher on risk management in crypto.
Here are some quick rules of thumb for you:
Never Go All In: Not on a single coin and not into crypto more broadly. I know that many of you are 100% in crypto, but down turns like this prove why that is problematic. I personally diversify into stocks, metals, soon (hopefully) real estate, and yes crypto. This way I get to watch my wealth evaporate from many places at once… jokes jokes. The LUNA collapse has also underlined the dangers of going all in on one altcoin. All in on BTC, ok. All in on an altcoin, pray. LUNA was never more than 2% or so of my portfolio, and that was after a big big pump. When bought it was like 0.3% of my portfolio.
Never Invest More Than You Can Afford To Lose: Simple. Powerful. True. The last week or so has revealed that many investors have not followed this core tenant of crypto investing. Many were way over invested, and deeply over exposed to the LUNA UST chaos. Even I was caught with more exposure than I would have liked due to the UST3CRV stablecoin pool being drained of all but UST.
Keep A Cash Position: This is critically important for investors. I know that “cash is trash”, but this is not a market to be caught without a stablecoin bag. It gives you safety, flexibility, and income during hard times in the market.
Keep Position Sizing Low on Leverage: A lesson many refuse to learn. Bet bigger, win bigger!!! … but also lose bigger. Leverage is a tricky tool, whether we talk about trading on an exchange like Bybit or we talk about taking leveraged yield positions in defi. Keep your leverage low and keep your overall exposure to these products limited. And if you don’t understand them, then stay away altogether!
Know Your Risk Profile: This might sound overly obvious, but invest according to your own risk tolerance. I see so much risky behavior on social media, people buying or trading in ways I would never do. Did you hear about the crazy Korean trader who literally trades with no stop loss and takes naps while having multi million dollar positions open?
Yeah, that is WAY BEYOND my risk tolerance.
For some of you the thing I do may be way beyond your risk tolerance.
Or maybe defi is out of your risk tolerance.
A lot of people get in a lot of trouble when wondering out of their risk tolerance zone.
That is not to say don’t try new things, by all means you should.
But if you are scared of the risks of defi, but still want to try it then start with $100, not 50% of your portfolio!
NFTs Dead Again?
NFT trading volume has fallen off of a cliff again… like REALLY fallen off!
It is down 93% since this time last month.
The only real big spike recently was around the Otherside Metaverse NFT sale.
Does that mean NFTs are dead now? No. Of course not.
It just means the buying frenzy is over.
People are struggling to pay rent and put food on the table.
Monkey pictures are taking a back seat.
The NFT marketplace right now is largely a bunch of insiders trading with each other.
Not a lot of new money flooding in right now.
Personally, I am waiting for some capitulation on collections like Crypto Punks or Doodles.
Phishing Attacks Hit Major Sites
Last weekend various websites including Coin Gecko, Etherscan, and even some exchanges like Quick Swap were hit with phishing attacks.
First let’s talk about how hackers gained control of the websites and prompted anyone logging on to make an approval on Metamask.
This was due to a third party integration.
The phishing attack tried to get users to connect to a website called nftapesdotwin.
It is critical to always ensure you are taking the time to fully check and understand what you are connecting your wallet to.
The obvious red flag here is that Coingecko was sending a prompt to a different site.
The second attack was directed at decentralized exchanges including Quick Swap and Spirit Swap and was a result of GoDaddy, a domain host being compromised.
In this case the attack was even more dangerous as the front ends of the websites were hijacked.
Meaning that anyone trying to do a swap on these exchanges was at risk.
In this case it would have been almost impossible for the average user to detect.
The only advice from affected protocols was don’t use our services now.
Spirit Swap wrote up a post mortem HERE if you are interested.
Just a reminder, so much of what is going on in crypto is risky.
It is experimental.
You are a pioneer when you use this stuff.
NFT Trends by Sam
If you’ve been around crypto long enough, you’ll know to hold on for the ride when there’s a crash.
The NFT space, though, is a new vertical, so there’s less certainty about what to anticipate during a bear market, and also about what NFT trends to expect in general, regardless of whether we’re in a bull or a bear.
The macro environment suggests a more conservative period for NFTs.
ETH should remain in blue chips, with prices settling at lower levels.
It will be more difficult to mint out new collections, and there’ll be fewer pre-reveal hype-based pumps.
On the whole, we’re looking at a less speculative, casino-like time.
This should change when the wider economic situation improves, but the economic situation is difficult to predict, so it’s a constantly changing picture.
On the positive side, if you have funds to deploy, then we’re in a discount market and now is the time to buy.
The long-term arguments for NFTs remain unchanged, and when the cycle shifts, the psychology will too, so position yourself to be ahead of that.
One caveat to all this is that the NFT world can behave differently to other markets, and even to the rest of crypto.
It should become more conservative, but there is a strong degen core, and a heavy focus on art, risky plays, and overall counter-culture weirdness, so it’s reasonable to expect the unexpected.
If the market is more conservative, buyers will be less willing to speculate on unknown creators, so having fully doxxed teams will be important.
This was the trend anyway, as scams and rugpulls were getting out of hand and buyers wanted reassurance, but now it might be accelerated by market conditions.
Established names entering this trend could have two branches:
- Large corporate entities who include NFTs as part of their business strategies.
- Other, well-established artists entering the NFT space, whose work doesn’t come across as corporate, but who have a very professional, well-packaged approach.
What will be true of both is that they can create slick products, bring their own audiences, and meet the highest standards of quality.
Big names can afford to enter, regardless of the macro economic environment, and will have an eye on longer-term trends, which favor NFTs.
As an antidote to the sanitized nature of corporate names coming in, there will still be bizarre, sometimes incomprehensible meme projects that can potentially melt up (and down again) at a dizzying rate, and which can seem very random and unpredictable in their behavior.
Frankfrank is a recent (pre-crash) example of this, and seemingly illogical meme-value is in the DNA of NFTs.
The OGs themselves, CryptoPunks, are deeply imbued with this characteristic, and CryptoPunks in many ways set the tone for everything that has subsequently followed.
CC0 (no rights reserved)
Also going conspicuously in the alternative, non-corporate direction, will be projects using a CC0 (no rights reserved) approach, meaning that the artwork they create is in the public domain and can be utilized by anyone.
These collections will keep the degen flame burning, and some could become valuable, with the give-it-away, maximum-creativity CC0 model carrying authenticity and a sense of breaking away from traditional standards. MFers is a famous example of this approach working out.
Membership Passes & Web3 Startups
This model fits well with what NFTs can do, with tokens functioning as both keys and collectibles, and it looks likely to be further utilized.
Related to that, but taking it a step further, is the idea of NFTs as a means of selling exposure to or participation in projects akin to web3 startups, with Moonbirds going in this direction.
The boundaries and definitions of these kinds of NFTs are not at all clear, and such experimental unknowns have huge potential, but are risky.
If every project that promised a metaverse, delivered a metaverse, we’d have a lot of metaverses, but that won’t happen, because building a metaverse is hard work and takes a lot of resources.
Then there’s the issue of pointless, ghost metaverses.
Who wants to walk around an empty virtual space where there’s nothing to do?
As for artificial scarcity, metaverse land is limited and expensive, but why, when it can be created endlessly?
What’s actually of value is attention, so whichever team makes its metaverse the most game-like and fun could pull away from the competition, and a project that doesn’t place emphasis on scarcity may also do well.
The Social Media Marketplace
Coinbase has taken cues from social media, incorporating social media elements (such as a YouTube-style comments section) in its NFT marketplace.
Kraken is in the process of creating an NFT platform, and could perhaps go in the same direction.
NFT marketplaces with elements of social media might appear more accessible to NFT newcomers, and could go some way to mainstreaming NFT collecting and trading.
At the same time, Instagram is experimenting with incorporating NFTs (as Twitter already has), and if other social media platforms follow, NFTs would become more visible and easily understood.
This can all be seen as part of the transition from web2 to web3, with crypto and NFTs integral to the process.
Streamlining the Space
There are some observers rubbing their hands together at the prospect of NFTs imploding and disappearing forever.
While the crypto market has been taking a hit right now, the total obliteration of NFTs is simply not going to happen.
There may be a streamlining of the space, but the underlying tech is here to stay, and in the long-term, clear-outs are a good thing, as we get to see who and what are sticking around for the duration.
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
If you really want to take advantage of fastest growing asset class EVER, I highly recommend you join us in the Premium Investor Report.
You’ll immediately get access to:
- Deep dive Altcoin report & The Trending Coin Report
- Technical Analysis on the crypto large caps and overall market
- Token sales, Airdrops and DeFi Tutorials
- Updates on the NFT Ecosystem and new mints
- My Investment Portfolio Updates
See you next time!
Lark and the Wealth Mastery Team
TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.