How Not To RoundTrip All Your Profits This Year
Understand this year's market moves and avoid the traps
Photo by Rodolfo Marques on Unsplash
Me: "Oh my god, it just hit 20eth!"
Friend: "Are you gonna sell?"
Me: "Nah, it's gonna run."
Yup, this was me early 2022. I held onto NFTs that 100x in value when ETH was at $3k, possessed by 'hopium' that it was up only forever.
For the rest of the year, I swore to avoid repeating the same mistake and instead focus on deeply understanding the market. As they say, we learn from our failures, not our successes.
What will happen in Q1/Q2 2023?
December was quiet due to tax loss harvesting. January, the market is hot, led by overall macro, Trial of Jimmy The Monkey, previous participants returning, $BLUR airdrop farming, and projects sharing key roadmap announcements.
Prediction:
Market stays active over Jan/Feb, cools off in March, and picks up in April/May due to conferences.
Collections see pre-pump as people buy-in to attend events and post-pump/dump depending on the execution. We saw what happened to Pudgy Penguins and Art Blocks post Art-Basel.
Who is the comeback kid of 2023?
CloneX, Doodles, Azuki, DeGods, Moonbirds: all of these projects faced strong FUD in 2022, and the year ahead is full of execution risk.
CloneX needs to tap into the magic they once had. Doodles communication needs to improve vastly. Kevin Rose must find his entrepreneurial spirit. Azuki requires more trust, and DeGods team need to prove they can build a community outside of Solana.
Prediction:
Kevin Rose will go all-in on Moonbirds and finally use his treasury war chest to aggressively rebuild value.
Azuki will solidify itself as the no.3 collection after Bored Apes and Cryptopunks. DeGods/y00ts overtake CloneX and Doodles.
What will happen to the art market?
Capital will continue to flow towards the art market until the beginning of Q4 and then slow down as the economy rebounds. ArtBlocks Curated will be the best-performing niche of 2023 and Snowfro will bring ArtBlocks platform into the mainstream.
A new bracket of artists will emerge supported by market participants who can't afford the likes of XCopy and instead choose to support newer talent.
Prediction:
We will see the ArtBlocks Chromie squiggle algorithm power a household brand which enters into digital collectibles.
Museum of Modern Art purchases generative art off the back of their announcement.
War of the chains - Solana VS Polygon
Sam Bankman Fried toasted Solana's reputation, however, we see there is a real community on that chain. 2023 will be the year when Solana needs to rebuild and convince brands and market participants that low-cost fees and transaction speeds are not the chain's only selling points.
Polygon is the underdog right now. The team has aggressively onboarded corporate brands, and this year they realised that while they won the corporate battle, there is no culture on Polygon. This year we will see the team lean into pfps and attempt to build a community.
Prediction:
As the market matures, it is unlikely to be winner takes all, but specific blockchains become known for niches, Ethereum for premium collectibles, Solana for gaming, Tezos for art, and Polygon for unlimited-sized collections.
How Not To RoundTrip All Your Profits This Year
BUY A COLD WALLET
I know what you are thinking, security is boring. Well, the scammers don't think so; in fact, it is highly lucrative. The COO of RTFKT had seventeen Clones stolen this week, and OG punk holder Crypto Novo had over $1m+ of jpegs stolen. The attacks are becoming increasingly sophisticated so buy a cold wallet & DO NOT MINT FROM YOUR VAULT.
ADAPT OR LEAVE
The way to make money in 2023 will not be the same as in 2022. Stay curious, and stay active on socials. Even when the market is quiet, understand how liquidity and interest moves. The best traders never leave the market, and it's not surprising that they are killing it this month.
SCARED MONEY, DON'T MAKE MONEY
Profit comes, profit goes. Be disciplined about how you enter/exit your trades. Don't hold on to collections hoping that it will be the next Bored Apes because the next Bored Ape will not look like that collection. Stay curious about everything and size trades properly without risking profits. Sometimes you learn more sitting on the sidelines than you do actively trading.
Oh just one more thing…
Tag me @_thesignal on Twitter and tell me what you liked about this week’s post. Let’s just say it won’t go unnoticed this month 👀