Crypto portfolio update

Exposure: 24.5%

Net return: 598.9%

Comments: The crypto market has gone nowhere the past two weeks, though sentiment continues to be bullish since BlackRock filed for a Bitcoin ETF 3 weeks ago.

I'm having doubts about this narrative however, as BTC has stalled after a mere 25% rally:

Now considering that the Fed is still looking to raise interest rates and a recession seems imminent, I'm not inclined to "go big and HODL" at this time.

I still prefer to be sitting in stables, though there are some opportunities I think are worth allocating into (more on that next).

Current allocation:

 NFT crash

The big news this week came from the NFT sector, where the floor price of every project fell off a cliff.

The gist of what happened:

• During an Azuki event in Las Vegas, the team announced a new collection titled 'Elementals' and released this trailer:

• Everyone was excited for the mint and reveal, but both turned out to disappoint (for reasons I won't get into here).
• Many OG collectors - including some whales - expressed their unhappiness by selling their holdings.
• The resulting dip in Azuki prices triggered a liquidation cascade among Blend borrowers and leveraged holders, which extended to all the other NFT collections.
• The floor price of many NFTs dropped -40%, with the OG Azuki collection falling over -60% in just a few days.

My thoughts:

• The team fumbled the execution of the mint, no question about it.
• From a 'luxury collectible' perspective however, the new collection is excellent.
• The team made sophisticated design choices that were not well-communicated in advance. The immediate reaction upon the reveal was therefore negative, as the audience was expecting something different.
• 0xtc wrote a good thread on this here.

• I believe the initial outrage was an overreaction, and that once people calm down and take a second (deeper) look, they'll quickly learn that it's not that hard to tell the new collection apart from the OG collection.
• The price rout we're seeing today is - I'd argue, largely - a function of the overall crypto bear market (low liquidity conditions) and Blur's subsidies for farmers to keep lowering the floor price.
• Both these issues are temporary, and with this new entry-level Elementals collection that lowers the barrier for new holders, I think the fundamentals of the Azuki ecosystem has actually improved.
• TLDR: The Azuki ecosystem is going through some short term pain, but there is now a foundation that better capitalizes on the coming bull market. Soon, people will forget about the temporary fumble but the fundamentals of the project remain solid.
• Right now the Azuki OG floor has dipped to ~$12,300 (6.6ETH). When the bull market comes around, I can see it going up to $40,000 quite easily.

• In my view, the best Azuki investments right now are the OG collection and high-rarity Elementals. Accordingly, I've allocated into both.

Admin update

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 Winter trip to Nagano

Travel vlogs are great for relaxing before bed. Here's one I came across recently that I enjoyed:

 Quote of the week

In sports, one of the primary sources of advantage is choosing how to play the game.
In life, one of the primary sources of advantage is choosing which game to play.

- James Clear

Thanks for reading, and have a great weekend.

Cheers,
Slowmad

P.S. If you have any questions or feedback, let me know at: chris[at]digitalslowmad[dot]com