DYOR — To hold or not to hold II
In the previous post, I’ve reflected on the first and most common successful NFT launch. Today, I will study two more.
The first is the commonly unsuccessful NFT launch. Unsurprisingly, it accounts for 50% of the NFT projects within the space because as much as there are some successful projects, there are even more unsuccessful ones. Reasons could be because the team has every intention to rug, or the art & utility has not much value to bolster the confidence, or that there simply isn’t enough hype within the community. As such, the projects will often follow a chart like this:
It looks very simple, and it is, because the nature of NFTs and the unsuccessful launch of the project likely will launch it to zero. However, notice how after the launch it has a small spike in price before it dives to zero?
If a project fails to sell out, this chart wouldn’t exist because it would not make sense to have any secondary sales when public mint is still available. But if it does sell out, likely there will be a little bit of volume from the speculators and it is a good time to exit the market.
Sometimes, when you hear of NFT influencers making calls on “free mints”, this is also what we call a degenerate play and that initial spike could get huge. If you are nimble enough, you could join in the call and exit quickly.
However, there are also projects which are genuine yet falls under this category and that is why not all whitelist mints or public mints require your participation. By now, you should be able to do your own research enough to know if a project will head down this direction.
So for the final 10% — it belongs to the legends of this space. It does not always happen, and it’ll surprise you when it does. These projects are so successful that once they mint out, you will never see them anywhere near their mint price. In fact, the price will keep shooting up that new players that come in will have already bought in at high prices. And when enough people does that, a new floor will be set. Give it enough time and momentum, the new floor will keep getting reset until the hype is over. Will the price by overhyped? Most likely, but whether it drops or not depends on the consistency and delivery of the team.
If you do get into one of these projects at mint price, your only concern is to sell them when you do think that it’s overhyped beyond believe and that the price will eventually correct itself soon.
However, if you did not get a chance to mint it and are looking to enter, there is only one period: post-reveal period. Most projects dip during reveal and will continue to dip, but these legend projects will eventually bounce back. If you truly believe in the project, this is your best window of opportunity to buy.
Be cautious as there are some projects which may seem like this at first, but dips to no man’s land after reveal. You only truly know if these projects are going to be the 10% projects after their reveal. Don’t be fooled though, while it could be the art’s problem since it’s an art reveal, it is usually something to do with the team — lack of communication, delivery, etc.
So these are 3 charts of how I view NFT projects and to decide whether I should hold them. I hope that it will be helpful to you as well.
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