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The NFT Roundtable Ep. 2 — NFT Bracketology, Macro Meltdown
Episode 2 of our new Roundtable Show, an around-the-horn style conversation on some of the top news in the NFT space.
Welcome to the Weekly NFT Roundtable, where members of the Lucky Trader team weigh in on some of the most pressing questions, news, and events in the web3 space.
The commentary below is purely opinion —not financial advice!
Banking Blow-Up 💣
Question 1: This weekend felt like a year, with the drama surrounding Silicon Valley Bank rattling the space. Stablecoin depeggings, panicked markets, and statements from founders about exposure to the bank filled the timeline — and while nerves seemed to calm on Monday, it was yet another moment of fear in a brutal year.
What were your reactions to the fallout, and what were your biggest takeaways from an NFT and crypto perspective? Are we out of the woods?
Tyler: My primary takeaway for crypto was another reminder of the extreme volatility and the need to zoom out unless you’re actively trying to day trade the market. And if you are trying to day trade this market, good luck. It was great to see green on the board, but with inflation and the macro banking situation, it feels like we are dangling off a cliff and could nose-dive at any time. Short-term still seems very bumpy, but crypto long-term feels stronger than ever to me.
For NFTs, Saturday was a huge reminder of how NFTs can quickly turn illiquid in times of macro panic. Saturday saw the single-lowest number of transacting wallets since November 2021 - a 16-month low. We have seen another small flight to safety in CryptoPunks, reminding us once again they are king. Nothing else is really all that safe (outside some top art sets).
Ghost: It was certainly scary to see USDC depeg, and the past week honestly felt like a year. And in a perfect encapsulation of how insane a roller coaster this space is, this week has felt euphoric as BTC and ETH surged on the Fed’s moves.
I do think that seeing the clear flaws in the traditional banking system makes the case for crypto even stronger — and maybe this event inches us closer to a decoupling. For NFTs, Tyler nailed it on the head — it’s all fun and games at the casino until an event like this reminds the market how scary things can get. You don’t want to be holding the degen speculation assets when the music stops.
Jason: I think Tyler said it perfectly, though I will add this was a particularly bullish test for USDC and Circle. The team handled the situation with confidence and prevented a “bank run” before the U.S. Government even announced that assets were safu.
It was also a little bit shocking to see Bitcoin and Ethereum recover so quickly. I assume people are thinking due to the collapse of Silicon Valley Bank, the federal government can’t continue to raise interest rates in an aggressive way. I’m not economic expert. It’ll be interesting to see how some open-ended questions are answered over the next few days and months: What will happen to smaller banks? Will the fed continue to raise rates? Is the government attacking crypto on and off-ramps? What happened with Signature? I don’t know, we’ll see.
Logie: It seems incredibly ignorant to act like I was “unfazed” by this event, but because I’m not a macro expert and don’t have intentions to short-term trade the market, I was just watching from the sidelines, attempting to do my best to cut through the doom messages and actually figure out what was going on.
I think Tyler’s reminder about the illiquidity of the NFT market in incredibly uncertain times is super timely, particularly as the second-order effects of this ordeal may take a while to unfold. I believe it’s highly unlikely we’re “out of the woods” and I’ll be setting myself up to minimize emotional distress should more pain come.
Bearish Birds 🐦
Question 2: Speaking of NFTs and SVB, the PROOF Collective was one of the first projects to reveal exposure to the bank. Moonbirds saw one of the largest dips in the space this weekend, falling as low as a 4.25 ETH floor, though price action was driven by one Blur farmer dumping a massive position. At what price are Moonbirds a buy, and what was your reaction to this weekend’s freefall?
Tyler: I was talking with Sergito over the weekend and he shared a theory of his that all NFTs will revisit their mint price. It feels like Moonbirds is actively on this path, which would have been impossible to imagine just a few months ago. At this point I think it’s very possible, and perhaps likely, that Moonbirds see 2.5 ETH floor. If/when that happens, they probably become a strong buy, and a narrative of a “fresh start” might begin to circulate.
Ghost: I think with the backdrop of this weekend’s chaos, the Blur farmer tanking the market made things look a bit exaggerated. While the ecosystem has a lot of trust to rebuild with the broader NFT community, I don’t think the Birds are on a straight path to zero as this weekend’s action would make you think — and I think they are probably approaching a buy territory. A lot is going to hinge on the next few drops as the PROOF Collective re-pivots to an art focus.
I do, however, think that it’s going to be really tough to overcome the insane expectations that come with an asset that climbed to ridiculously quick valuations out of the gate. Most non-minters are completely underwater, and that’s a difficult relationship to mend.
Jason: I’m not actively buying NFTs right now. There are very few projects I’d consider “buys” at any price: CryptoPunks, Bored Ape Yacht Club (if it got low enough), and some of the top art projects. But straight line bias works in both ways, up and down. Moonbirds are not headed to zero unless Kevin Rose announces the project is dead. Just be careful.
Logie: I made no moves during this wildness, but the Moonbirds' floor price was on my radar the entire time. I still think it’s difficult for Moonbirds to pay off a floor price of 4+ over the next few years as a notable “little brother” to the PROOF Collective Pass, but if it were to find itself in the 2.5-3 ETH range, I think I’d be a buyer.
Meta Madness 📸
Question 3: Instagram made headlines Monday, with an announcement that the social media giant was sunsetting its NFT initiatives. How surprised are you by this move, and what do you think it means for the broader space? Will we see more companies follow suit, or are NFTs/digital collectibles here to stay?
Tyler: I was fairly surprised. NFTs and digital art just make sense for Instagram. It feels like a move where they are just sticking their heads in the sand related to the broader digital art movement. But Meta is a company with a lot of bills to pay and without a clear monetization path in the near future, I guess I understand the move.
For the broader space, this is good. It’s one less giant to deal with and take market share from existing players. From an onboarding perspective, most people who found NFTs through Instagram relate NFTs to scams (because most NFTs advertised on IG were in fact scams). So I don’t think we take a big onboarding hit here.
Ghost: While we love to poke fun at Meta and Zuckerberg, their giant shadow looms over so much of the worldwide adoption of tech. As someone who thinks NFT tech is inevitable, it was definitely a bit jarring to see them abruptly turn away from what seems like a movement that won’t be stopped.
Despite this move, I don’t think we’ve seen the last of Meta when it comes to the space, and agree with Seedphrase’s eloquent tweet from Monday: “Instagram will be back next hype cycle. Guaranteed.”
Jason: Instagram is one part of Meta’s huge portfolio. This is a completely unsubstantiated suggestion, but at the right odds, I’d be willing to bet another Meta company is taking over the Instagram NFT initiative. If not, it will definitely return when NFTs are cool again (making money again).
As for other companies following suit, we will probably see that, yes. Companies have to cut down on costs during times of rising interest rates and uncertainty in the markets. The first initiatives to go are the newest with the longest timelines. I know a day in the crypto and NFT space is a year, but for the Web2 world, a year is a year, and NFTs are likely years away from mainstream acceptance.
Logie: Digital collectibles are definitely here to stay, but companies (particularly publicly traded ones) need to make money. Jason’s right, companies will continue to cut costs where they don’t immediately lead to profit opportunities, and it is likely the overhead was just too large and the impact that digital collectibles on Instagram were not making enough of a positive impact at present time.
I think we may see more companies slow the rate at which they innovate with collectibles or NFTs, but I think over the next few years the number of companies joining the space will far outpass those leaving. Perhaps my hot take is that most companies will merely deviate from their initially intended web3 plans, opting for something more durable than “drops” or “trading” which was probably very enticing during the bull market.
TwelveFold Tremors 🌋
Question 4: Yuga Labs began the process of minting and transferring the TwelveFold outputs on Monday, giving the space the first look of the full collection. The reactions were extremely polarizing, with many critiques regarding the lack of variety of outputs. We’ve talked extensively about TwelveFold — but did seeing the full collection change your opinion of the drop? Will the project be strictly a ‘historical’ play, rather than an acclaimed artwork?
Tyler: My initial reaction looking at TwelveFold is “God these are terrible.” But then I started looking at them individually on Ordinal Hub, and they are growing on me. My spicy hot take - the detail on these is actually really good and I think they would look incredible as 3-D physicals. I don’t care for them as 2d digital art but they would smash the wall test for me as physicals. And the way the shadows work on the pieces, it seems like these may have been created from physicals. I hope that’s the secret twist for holders (and frankly they deserve the accompanying physical artwork for the now $59,000 price tag).
Regarding the question, these will go down as historical for sure. Their the first major, notable, and original NFT collection launched on Bitcoin. I could see them 10x’ing over time if Bitcoin NFTs become a movement. If I had to bet on BAYC or TwelveFold on a 10-yr horizon, I’m probably picking TwelveFold now.
Ghost: I totally glossed over (like many it seems) the structure of the collection, which includes 25 different subset themes of 12 outputs each. So while the kneejerk reaction was “all these outputs look similar and shitty”, it makes more sense after seeing that detail.
I’m not a huge fan of the art personally, but I don’t think it’s something that is Kevin-level punchline-worthy — which is how a lot of people on the bird app seemed to be treating it upon reveal. I do think these will be historical simply for the attachment to Yuga and the company’s first experiment on BTC. I also saw a lot of people comparing the price of the drop to other notable art pieces, which is absurd considering it was an auction! People paid what they thought it was worth!
I mostly feel bad for the artist — who was put in a pretty impossible situation from an optics perspective. At the hype level that Yuga commands, it’d be nearly impossible to live up to what people expected. And top-tier art like Fidenzas had far less speculation — the market was able to form their opinion post-release.
Jason: I said it on the show, and I’ll say it again – no one (who purchased these) gives a sh*t about what they look like. The complaints are coming from non-holders, and if holders are complaining, they’re just doing it as popular opinion. If they’re so ugly, and it’s supposed to be an art project, fire sell it. But that won’t happen because this was never an art play.
Logie: Jason is right again. That’s twice more than I wanted to say that during this roundtable. While I do think the art sucks and am disappointed in the outputs, the secondary market and the buyers never actually cared. No one should be comparing this to actual generative art. No one should even be calling this art. These are more like fungies in the mind of buyers/sellers.
You want art? Buy [my art bags].
Meet the Roundtable:
Ghost: Ghost is an NFT analyst at Lucky Trader. He has been in crypto since 2017, and entered the NFT space via NBA Top Shot in January of 2021 before minting Bored Apes and degenning into the broader market.
Tyler: Tyler is a high-volume NFT trader, having reached the top 100 in NFT sales revenue using NFTBank’s rankings, a Pengu maxi (in Luca we trust), and a writer for Lucky Trader. Tyler’s writing spans market analysis, news breakdowns, project ecosystem overviews, and web3 opinion pieces.
Logie: Logan is a content lead at Lucky Trader and is best known for selling every good NFT far too early. He also maintains an irrational exuberance for clay-based NFTs.
Jason: Jason is an NFT lead at Lucky Trader. He has been involved in the NFT space since CryptoKitties in late 2017, and, like most, he lost a lot of money on Top Shot in early 2021. But nevertheless, he persists (with his Series 1 Legendary From The Top LeBron James Block).
Disclaimer: The author or members of the Lucky Trader staff may own NFTs discussed in this post. Furthermore, the information contained on this website or the Lucky Trader mobile application is not intended as, and shall not be understood or construed as financial advice. AI may have assisted in the creation of this content.