March Market Update 💦⛽️
Liquidity Pump
In just a few days, everything changed. The bullish macro thesis got much stronger this month as The Fed decided to backstop bank deposits and grow its balance sheet by hundreds of billions in just a couple of weeks. Risk assets follow global central bank balance sheets and thus should benefit from the issues related to global banks as the liquidity trade picks up steam and retail FOMOs in.
Cryptos are making multi-month highs, led by Bitcoin, which was designed for liberation from traditional financial systems. Furthermore, there are now advocates that are calling for $1M BTC in the next ~70 days based on a narrative of the US entering hyperinflation as The Fed prints USD and the USD loses status of global reserve currency. Web3 assets are still in a deep winter that has crushed most assets by 95%.
Specifically, PFPs have seen the most pain with most of the blue chips bleeding out precipitously with no end in sight. Sentiment is very toxic with many calling for “zero” on the most popular collections - this could be capitulation. Blur Season 2 farming has driven many floors into the ground with a small group of uneconomic traders flipping swaths of floor NFTs between themselves as they lose money and hope they can recover the losses through a future BLUR token airdrop (ending March 31). It’s incredible how a project’s floor price can crater so fast with so few traders (2-10) and only a small % of assets being traded (~90% of assets in most blue chip collections have not traded in the past 3 months and ~70% in the past year). The same velocity of price action can be expected on the upside as we have recently seen on the downside. The projects that make it through this bear market can increase by > ~10x when the tide turns and ETH stabilizes. Zooming out, digital asset fundamentals have been growing amidst the FUD with Fortnite and Sony, amongst many others, planning on enabling NFTs in their platforms.
My bull thesis for the next 6 months has strengthened on expectations of inflation melting, the Fed pausing, and global central bank balance sheet growth.
My top investment ideas are CloneX, Mutant Ape Yacht Club, Dookey Dash Sewer Pass, Otherside, RTFKT Animus Egg, Moonbirds, Doodles, Murakami Flowers, Ethereum, Bitcoin, and ARKK.
RTFKT announced working with Nvidia on AI functionality for Clone X and that forging for Season 1 RTFKT Nike AF1s will be on April 24th. Expecting updates on Pods, Animus, Rimowa, and MNLTH X next month.
Otherside’s Second Trip just took place on Saturday and it blew away all expectations. Also, Gucci just announced they will be involved in Otherside.
Holders of Dookey Dash Sewer Passes were able to convert them into HV - MTL collectibles that will be revealing at the end of the month.
Moonbirds did a Q1 update where they announced a clear vision for the ecosystem which will focus on art.
Doodles stated that they are no longer an “NFT Project” and are focused on becoming a major media company, while focusing on driving value for original collectors. Doodles 2 Genesis boxes will be opening at the end of the month.
The next investment idea will be out in a few days. If you haven’t already, please upgrade your subscription now to receive it when it is published.
To the moon and beyond,
Andrew
Disclaimer
The content of this letter is for informational and entertainment purposes, and should not be construed as personal investment advice.