Harmony Hack, Crypto Stocks, Token Unlocks & Goblintown NFTs
In This Issue
- I share my thoughts on the state of the market, the Harmony hack, NFTs still aren’t dead, Crypto stocks & token unlocks.
- Sam has a report for you on Goblintown NFTs.
I want to make sure you didn’t miss anything. The markets are going to move fast and who knows when we will get another opportunity to get in on a down!
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What’s On My Mind by Lark
The State of the Market
Well… we are still alive. So that is good!
Overall though a boring week after the terror earlier this month. BUT, don’t get complacent.
July could be rough. And we could still retest those previous lows. All eyes will be on the CPI data coming out in two weeks.
If it is bad… then hold onto your butts!
Bitcoin Monthly RSI
The monthly RSI for Bitcoin has hit its lowest level EVER!!!
Showing once again the truly unprecedented markets that we are in.
Oversold and “bottom” signals are flashing everywhere. But the macro fears are likely to invalidate many of them.
Still though, I am happy to average into positions here regardless of whether we can count on the bottom indicators or not.
Commodities & Russia
Commodity Prices are finally seeing some relief.
Obviously, markets are fragile and these prices can soar again, but it is nice to see oil down by 10% and wheat down by 33%. This could go a long way towards easing price pressures and helping consumer inflation slow down.
BUT, G7 leaders are still looking for ways to punish Russia and have even discussed trying to cap Russian oil prices to limit their profits and thus their ability to wage war.
BUT, such a move would probably cause, at least short term, chaos on global oil markets. And when there is chaos there are price spikes.
Plus, how would Russia, the world’s largest exporter of wheat, react to such a move? Would they retaliate in other areas like limiting wheat flows?
The political class is playing a dangerous game and it will be regular people who quite literally pay the price. Let’s
hope cooler heads prevail.
Well it seems that Ark Invest’s Cathie Wood doesn’t want to wait anymore, she has said that she thinks that the USA is already in a recession.
The 2 and 10 year treasury yields have inverted which usually signals a recession is inbound.
The price of copper, sometimes referred to as Dr. Copper for its ability to diagnose markets, is falling and when this happens recessions often follow.
That all being said opinions vary widely with many analysts from major financial firms saying that the odds are low and if one does happen that it will be mild and short.
The question is who do you want to believe?
European Inflation is officially out of control with rates in Spain hitting 10.2%.
This has prompted the ECB to take action with their first rate hikes likely coming in July. Not sure why they waited so long, but inflation has gotten bad.
For reference, the FED started raising rates in the USA in March when inflation hit 7.9%. So essentially European Markets, which have been hit hardest by the price fallout from the conflict in Ukraine, are just now getting in the fight.
FED Rate Hikes
The Cleveland FED Reserve President has said that she backs another 0.75% increase in interest rates in July.
She also said that this is just the beginning and expects the rates to reach 3.5% by the end of the year and to be over 4% in 2023.
She also said she expects it will take at least 2 years before inflation falls back to 2%.
Translation, we are not out of the woods yet.
In what is still a to be confirmed story, Uganda claims that they are sitting on the biggest gold deposit in the world.
How big? It would literally double the supply of gold.
How viable is the find? How recoverable? How long will it take to mine?
I like gold. I do. Gold coins are tight. BUT, this one single goldfield could irrevocably alter the gold markets.
The only question we need to ask when faced with such a story is… Got Bitcoin?
This week it was revealed that the bridge to the Harmony network was hacked for 100 million dollars. Which is a shocking amount of money.
While the team had offered a million-dollar bounty to the hacker to return the funds it seems this was not enough as the hacker has since started to unload funds via mixers to wash the funds.
Bridges remain one of the most dangerous pieces of crypto tech right now.
NFTs Still Not Dead
This week a venture capital firm backed by Peter Thiel, Marc Andreessen, and Mark Cuban announced a hundred million dollar fund to buy NFTs during the bear market.
When you see the floors being swept on things like Crypto Punks then I guess we will know who the buyer is!
BTW the Punk floor did indeed get swept about a week ago moving the price from 50 ETH back to 70 ETH.
NFTs remain deeply on the speculative edge of crypto, but I suspect that we will see many mini NFT bull runs between now and the next all time highs for Bitcoin.
New collections will make money of course, but older popular collections will also continue to attract a lot of investor money.
As mentioned before I will continue to keep an eye out for deals.
Buy Crypto Stocks During Bear Market? Maybe…
For those looking to add some crypto stocks, the bear market may offer an interesting opportunity to buy companies like Coinbase at a good discount.
Goldman Sachs just downgraded Coinbase to a sell rating, not that we trust Goldman, but their comments have some merit.
More layoffs are expected at the company and their recent announcement to get rid of Coinbase Pro has investors worried.
Coinbase as we know makes most of its money off of fees, and if traders do not like the replacement, they will simply go to one of the many competitors all of which have lower fees by the way.
Goldman is predicting a 60% revenue decline.
If you are looking to get some COIN then keep an eye out, we might see some very good prices form up during the bear market.
I have been nibbling small amounts on this, and will likely continue to.
Token Unlocks – Best Time To Buy?
There are a few big token unlocks coming up. One in particular I want to talk about is AVAX.
I suspect that bear market unlocks may offer good buying opportunities and shorting opportunities for investors and traders.
Avalanche will see 2.5% of the supply unlocked on June 30th. This is about 10 million AVAX coins, which would represent half of the daily volume.
This could provide two opportunities for investors.
One is to buy the dip, fully understanding that the bear market is not over and the price could still go lower, but such an unlock could represent an opportunity for those stacking AVAX.
Alternatively, go short on AVAX, high risk of course and a stop loss must be used.
How did other big unlocks go in the last few weeks?
NEAR dropped 25% on June 13th when it had an unlock of 2% of supply. This was also a very bad day for markets, so hard to draw too much of a conclusion.
ALICE on June 15 had a 4% unlock, and the price rallied by about 20%.
ILLUVIUM on June 28th had a 6% unlock. The price fell slightly around 5%.
So, yeah, a bit of a mixed bag in terms of results. But AVAX may see a stronger sell-off since big investors like Three Arrows Capital may be forced to sell their positions. Anyway, just an idea and something to watch for AVAX stackers and traders.
Goblintown NFTs by Sam
An unexpected success story from the bear market has been the Goblintown NFT drop, by Truth Labs.
Just to catch up on the background, Goblintown is a collection of 10,000 cartoon goblin PFPs that launched in May, during ominous market conditions.
It was a free mint with CC0 licensing (also known as no rights reserved, meaning that all artwork is in the public domain), and it captured the NFT mood of the moment perfectly: yes, the markets were on a step-by-step downward trajectory, but hey, why not embrace the absurdity, buy a goblin, and ride it out?
The Goblintown mint seemed to come out of nowhere, no-one knew who had made it or what it was, and yet it rapidly took off, with the average secondary market sales price rising to a high of around 7.6 ETH at the beginning of June, before settling back down to a current price of around 3.3 ETH (and don’t forget, that’s all from an anonymous, free mint).
It attracted masses of attention, and with the launch of the follow-up McGoblin Burger offshoot, it became clear that this project was actually a well-planned maneuver, meaning that there was no shortage of speculation about who was behind it.
Finally, in the middle of June, Goblintown’s creators revealed themselves as Truth Labs, an organization that up to that point had not been so widely known, or at least not to the extent that it is now.
Sell the news
Before diving in to who exactly Truth Labs are, it’s worth noting the effect that the announcement of their involvement had on Goblintown prices, and what that indicates about NFT trends in general.
Basically, immediately after Truth Labs revealed their creative role, the price of Goblintown NFTs went down, while the price of two older Truth Labs collections made some gains.
Since then, the Goblintown price has climbed again, while prices on the older collections have corrected back down.
The Goblintown price drop may have been partly due to the creators being less well-known than names such as Yuga Labs and Beeple (who some observers had speculated might be involved), and the generally negative state of the market could also be a factor.
However, this kind of sell-the-news price movement is common in NFTs, and worth being aware of.
When an NFT collection is wrapped in mystery and speculation, has a reveal waiting to happen, or a development in the works, prices tend to go up, and then upon completion there’s often a sell off.
This isn’t a concrete rule, and there are exceptions, but it happens a lot.
If a collection is high quality and committed to the long term, prices are likely to rise again after a sell off, and so good entry points can be found.
In fact, making gains again after the dip is a good indicator that buyers have confidence in the collection and its creators.
Who are Truth Labs?
As a creative collective that manages to be both mysterious and upfront at the same time, Truth Labs revel in–to quote their own description on the Truth site–“delightful blockchain mischief”, and they play with cult-like, mystical imagery.
Simultaneously, though, their self-description also talks about “exploring creatively, developing rich, fun worlds and experiences (both IRL and in the digital realm), and providing a platform for new voices and visions in this space”, which is reasonably straightforward.
They’re open and transparent about who they are (the team is doxxed and communicative, and trusted within the web3 space), and what they want to do.
Over on the Goblintown site it’s plainly stated that there is “No roadmap. No Discord. No utility. CC0.” It’s an unorthodox but honest approach, which is a good all-round summary of Truth Labs and its character.
Back in January, before they made Goblintown, Truth Labs launched the Illuminati NFT collection, along with the Illuminati Association DAO, which aims to “identify, guide and assist web2 artists as they navigate into the web3 world”.
They also created The 187 collection, and last week organized a wild-looking party at the NFT.NYC event.
By the way, for those into esoterica who like going down rabbit-holes, Truth Labs have referenced Eris and Discordia, suggesting they may be followers of a philosophy/religion/parody-religion called Discordianism.
Weirdness, hype and execution
It’s unusual for a parent/debut collection to be valued lower than the drops that follow after it, but that’s the case with Truth Labs’ Illuminati NFTs, which currently have a floor price under 0.6 ETH.
While it’s unclear where either Goblintown or Illuminati are headed (Goblintown makes a point of having no roadmap), and to what extent they will be interlinked (if at all), Illuminati NFTs currently look like they might be worth picking up, particularly as they’ve now corrected down from their recent price pump.
Broadly, if you wanted to bet on an NFT-focused web3 team/organization, the top-tier choices are Yuga Labs and Moonbirds, but those are very expensive to buy into.
Among the other contenders–and there are many vying to get ahead–Truth Labs stand out as a promising competitor.
They have an intriguing balance of weirdness, hype and execution, appear well-intentioned in a world of rug pulls and doubt, and have proven they can pull off a spectacle at unlikely moments.
NFTs are a wildly uncertain arena, but it’s plausible that Truth Labs can now go on to build further from Goblintown’s success.
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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.