I joined the NFT space in early 2021 and even within just the past year have witnessed my fair share of both bull and bear rallies. When getting caught in these rallies it can be very easy to lose track of the fact that market sentiment shifts over time and will never go straight up or straight down forever. Generally speaking, crypto based assets will alternate between periods of buying and periods of selling based on the conditions of the overall crypto markets as well as other financial markets such as the NYSE or foreign exchanges.
Understanding how to react within these volatile markets is the first step for preparing our doomsday portfolio.
Last June, I started seriously trading NFTs and It was during this extended bull run thru last September that I was able to nearly 100x my initial investment into NFTs. With phrases like WAGMI being thrown around constantly and new noteworthy collections all the time, I was in a prolonged state of euphoria. This mindset would ultimately lead to many NFT maxis overinvesting into some rather illiquid assets, not managing risk and hemorrhaging their portfolios when things went south.
In mid October of 2021, the entire crypto space took a tremendous hit. I remember the feeling of dread as I watched my entire portfolio lose over 40% of its value in less than a month. Just as fast as the profits had rolled in, they had begun to fade. I recall buying 4 Mutant Apes the night of their release for around 7 ETH each, watched them top out at 10 ETH, then, just two months later, down to 3 ETH.
I committed one of the cardinal sins in the crypto space, I didn’t take any profits! In fact, I did the opposite. Fearing for the upcoming tax season, in late November I decided to cut the losses on all of my Mutant Apes, just to watch them move to a 25+ ETH floor just two months later.
Ross, why are you telling me all of this? Well, all of this background isn’t to get hung up on the past, but to emphasize how crucial it is to react to the current trends of the market and not commit the big cardinal sins of trading: Not selling and taking
profits when things are going up and succumbing to fear and realizing big losses by selling at the bottom.
It’s my hope that my experiences trading will allow you to think about how you plan on navigating that next bull market and take profits along the way as well as pinpoint beaten down assets during the bear market that you think have a high potential for return when the next bull run begins.
People who frequent MVHQ’s Night Crew Twitter spaces will know that I am currently MVHQ’s resident bear.
While we’ve recently found ourselves in the midst of crypto mini-rally, I personally think that macro environmental pressures acting upon both the US and Global economy will at some point over the next year lead to another major market correction across the board. While nothing is ever certain in trading, preparing for a downturn in the market will present us as NFT traders a golden opportunity to build a well balanced portfolio at the bottom, and then ride it into the next bull market that comes after.
So there you have it. All this talk of bears and bulls and perhaps oversharing my own trading snafus, all of this was to set the context for what we aim to accomplish if shit ever hits the fan again as it did in November 2021: We aim to find NFT collections that have lost a considerable of their previous value that will provide strong ROI’s in the long term.
Now that I’ve explained my goal in writing this article, I wanted to briefly outline the main criteria I considered when creating this list of NFT assets that I believe are most deserving of being added to your DoomsDay portfolio.
1) These NFTs are more or less considered Blue Chips. I only wanted to select Blue Chip NFTs as I think purchasing new assets in a bear market leads to a great chance of them going to 0 or being outshone by newer collections that may be released during the next bear run.
2) These NFTs do not present the highest possible ROI. The assets selected for this portfolio won’t offer the highest upside since they’re already established collections. Think about it, a brand new stealth mint that comes out in bull run can easily go from .05 to 2eth in a matter of weeks. While I strongly believe most if not all of the assets in my doomsday portfolio will greatly outperform traditional assets, they will almost definitely not offer the highest returns on investment. However, as noted in the previous bullet, these assets were all selected because I deem them to be safer long term and less likely to go to 0.
3) These NFT projects have strong communities. One of the most important factors to the success of any NFT project is the community behind it. Think about it, a weak community means more panic selling, more undercutting, and less overall chance of withstanding the bottom of a bear market.
Finally, with the context set and our criteria in mind, let’s get to our Doomsday portfolio!
While Crypto Punks are not the first ever pfp collection on the blockchain, they still have an abundance of historical significance. Pair that with deep ties to Christie's auction house and one of the first major pfp collections to jump start the NFT craze as we know it today, Crypto Punks find themselves at the top of my list. Also, I’ve noticed that the pfp fad has been dying down as of late. To me, this illustrates that pfps that are still relevant have a lot of potential for even further staying power. Lastly, I like the fact that crypto punks haven’t delivered any utility (if you can exclude Meebits). I think too often in the NFT space we see projects with such lofty expectations of constantly delivering new value to shareholders, that eventually expectations cannot be met and price plummets. As it stands, there is almost zero expectation out of Crypto Punks to deliver further value to its holders and to me that makes it almost special. The value itself is in the history and clout of the collection and I believe that of all NFT collections Crypto Punks are the most likely to last for years to come.
If you don’t understand the platform that ArtBlocks has slowly been building out for the past year and a half, then you don’t fully understand Art Blocks. Art Blocks has surpassed an insane 2.5 Billion dollars in secondary sales since its inception and has some of the most notable generative art pieces in the world come through its platform. Similar to Crypto Punks I believe the main value with Art Blocks comes from historical significance. Think about how Picasso revolutionized the art world and his works are cherished and accrue overtime. I believe that Art Blocks has been instrumental in advancing the field of generative art and in time select Art Blocks pieces will be featured in mainstream museums with the best of them. For our Doomsday portfolio I would suggest targeting notable artists and ideally focus on either season 1 pieces or Art Blocks Curated. My notable Art Blocks picks are Fidenzas, Archetypes, Chromie Squiggles, Ecumenopolis, and Meridians.
This one is a no-brainer to have on the Doomsday list as Yuga Labs has constantly been setting milestones in the NFT community and the apes are easily some of the most recognizable NFTs in the entire space. The only reason the apes aren’t higher on this list is that I do foresee a possible outcome where Yuga begins to dilute their supply to the point of no return. Yuga has done a phenomenal job of providing valuable air drops and utility to its ape holders, but the argument can be made that a lot of this has been point-in-time utility. While I still feel confident in the team and believe these collections have so much historical significance and notoriety within the NFT community, there is still much uncertainty about where the apes will go next. For my own portfolio, I plan on buying multiple mutants in place of a single ape, as I believe it will allow me take profits along the way more easily.
Despite the recent FUD surrounding moonbird’s somewhat underwhelming nesting tier rewards, it is hard to deny the minds behind the birds. Kevin Rose can be defined as a serial entrepreneur with a plethora of successful businesses that he’s been able to start from scratch. I think given his background, Kevin Rose is well equipped to show that NFT projects really can become full fledged businesses and his connections from his previous endeavors could serve the birds well in securing mainstream partnerships driving demand for the project over time.
While doodles have some of my favorite art in the space, it is the team that they’re putting together that has me really excited to add a doodle or two to the portfolio. It was major news to me when Pharrel Williams decided to come on board as one of the heads of the project. People may be unaware that Pharrel has incredible pull in both the music and fashion industry With a plethora of influential connections to pop culture, I believe having this powerhouse on the team is reason alone to be bullish. To me, Pharrel joining the doodles team took an already blue chip project but gave it a real shot of becoming one of the first projects to bleed into Web2 and become a part of mainstream culture.
Well, there you have it. If you made it this far, thank you for taking the time to read my ramblings and get a glimpse at the assets I plan on buying if the NFT market ever melts down again. If you enjoyed this article let us know, or send us a list of what you think your favorite doomsday assets might be! Until next time.