Previous article Immersed in the beautiful vision that blue-chip NFTs will soar dozens of times, and potential blue-chips will soar to the sky. NFT blue chips have fallen dozens of times. If you buy better NFTs now, won’t they soar to the sky in the bull market? Dedicate more than 10 wealth codes
However, the dream is so easily achieved, which obviously violates some natural principles: it is impossible to have such a large market, which is large enough and known by many people, at least not considered as information asymmetry for people in the currency circle, but the investment participation threshold is so low, and the return is much higher than other targets and most FTs. You must know that the potential of FT can be discovered, which depends to a large extent on either having special insider information or having a deep insight into the industry. So, after thinking about it, I left a hidden worry at the end of the previous article. Can the dream really be realized? I think to achieve it, the following logic needs to be established:

• Blue-chip NFTs can return to the market value of the last bull market, and there is still huge room for growth;

• You can choose good blue chips, or even NFT targets that are better than blue chips;

• The average transaction price of blue chips is real, and you can sell your NFTs smoothly.

This article will analyze the above questions one by one. If you read this article and combine it with the previous one, you will probably become a player with absolute deep insight in the NFT field.

The first question is, does blue-chip NFT have huge room for growth?

The total market value of the last round of NFTs was 3 trillion US dollars. Now the entire NFT market is less than 10 billion US dollars, and the top-ranked NFTs have 5-20 times of growth space from their peak. In theory, there is still huge room for appreciation from a bear market to a bull market.

However, we need to consider two backgrounds: First, it was not until the last bull market that NFT truly formed a track and completed the journey from 0 to 1; second, the biggest driving force of the last bull market came from the Federal Reserve’s nearly zero-cost lending interest. Investors outside the circle could easily obtain investment funds, and were easily attracted by PFP-type NFTs, which are investment products that do not require blockchain cognition.

Up to this point in this bear market, we have not seen any major evolution in NFTs, so the singularity from 1 to 100 may not be seen in this bull market. Secondly, without the epidemic as a backdrop, it is hard to imagine that the Federal Reserve will reach the crazy level of rate cuts seen in the last bull market.

Another question is that the market value of NFT is calculated by multiplying the floor price by the total amount. If it is placed in the FT market, it is equivalent to multiplying the transaction price by the total supply.

It seems fine, but it is actually a big problem. FT uses the current price multiplied by the total supply, which is not the market value, but the fully diluted market value.

Since a large part of the tokens have not been released, when calculating the market value, the current price should be multiplied by the actual circulation. If the project does not make great progress or there is a bull market, then as the circulation increases, the price will decrease accordingly.

As for NFT, first of all, there is no release problem, all of them are in circulation, unless the MINT has not ended. It seems that the price will not be affected by the release, but if we look at another data, the actual circulation of most NFTs is only 1-2% of the total supply, which means that most of the supply is "locked"!

On the one hand, with only this amount of circulation and no sufficient funds to play games, can the current floor price be an effective price? Can it withstand the dumping of large investors after the price increases?

On the other hand, a large portion of these so-called "locked" NFTs are probably in the hands of dealers or projects, and cannot be really locked up like FTs.

Imagine if you have 500 BAYCs in your hand, and in the last bull market, you didn’t sell more than a hundred ethers worth, or you didn’t sell them at all, and now the price has risen to this level again, will you sell them?

The logical thinking behind FT's market manipulation is that the market maker absorbs funds at the bottom, then increases the price that traps retail investors, and then sells as the price rises.

But NFT has such scarce liquidity that, let alone retail investors being trapped at the peak of the bull market, the dealers have a lot of chips left in their hands, so whose chips are they going to absorb at the bottom? Without chips, there is no motivation to pull up the market. When market sentiment comes, the market will naturally rise without dealer control, and when it reaches the locked-in price, retail investors may not have made a move yet, but the dealers may have already made a move.

So, to summarize the first point, the high market value of NFT in the last round of bull market is a unique product. The high market value of NFT does not necessarily mean that the value of the NFT alone is also high. Due to the lack of trading volume, the price of NFT is not the result of full market competition. Every time the price of many NFT collections rises, there is huge selling pressure. This selling pressure comes from the chips of large investors that are "locked".

The second question is, can you choose good blue chips, or even NFT targets that are better than blue chips?

Of course, this depends on who makes the choice. The top NFT players must have their own unique features, but for ordinary people, even professional researchers find it very difficult.

Let’s first look at the Ethereum main chain, the birthplace of NFT. It is hard to imagine that 5 of the top 21 FTs have almost no transaction volume, or single-digit Ethereum, but this is how NFT appeared.

Secondly, we come to other popular public chains, such as the AVAX chain. The liquidity of Crabda and Huners, the top two in historical market value, has almost dried up and returned to zero. There are no new buyers, not to mention the targets ranked lower.

The recently very active Solona's NFT ecosystem ranks in the top two, and the situation is similar.

DeGods has only had one transaction in the recent day, and it is not known whether this is to maintain the illusion that the project is not dead.

When liquidity dries up, we can actually roughly judge that the project has returned to zero.

The results have shown that the probability of selecting potential blue chips is actually very low.

We also need to analyze the reasons behind it: why were most NFTs dead in less than a year, even though they were stars yesterday?

The reason is probably that NFT does not have much value at all, and the cost threshold for creating a project is too low. You can publish a collection on ME, design a set of pictures with CHATGPT, and then spend 60U to publish it.

With such a low cost, NFT still wants to be sold. Apart from the aesthetics and project operations we mentioned, what is the biggest key point?

Some people say that it is a boastful narrative.

Some say, advocate scarcity.

Some people say that the project team continues to work hard to empower NFT.

Others say that they rely on creating hot spots, letting celebrities hold shares, and constantly controlling and pulling up the market.

In fact, these are all talking about the same thing, making up a Ponzi scheme.

The essence of Ponzi's is to prove that the stone is not just a stone, but a scarce stone. Celebrities will also come to buy the stone, and they can get a lot of profits after buying the stone, so as to get others to buy the stone.

The problem is that stones are not scarce, and everyone can add meaning to stones.

The difference here lies in who will add more meaning to the stone?

The answer is that it is difficult for us to see or get useful information about newly released NFTs, whether it is transaction volume, sales ratio, or picture art. We cannot directly know what the founder does, and we have no way of knowing whether he has the ability to promote it. Without essential information, we cannot analyze, and without analysis, we cannot choose, so it is particularly difficult to select potential blue chips.

So, to sum up, if the essence of NFT does not have a practical use scenario like games or domain names, it is a worthless Ponzi. For Ponzi, how to identify who will be a good Ponzi in the early stage? It seems that the only way is to touch the lottery.

Finally, let’s talk about the last question: The average transaction price of blue chips is real, can you sell the NFT in your hands smoothly?

First, let’s focus on the blue chip BAYC to see its liquidity so that we can get a preliminary answer on whether it can be sold.

According to the crawled data, there are a total of 1,729 BAYCs with only one lifetime transaction record. Looking at the coins for sale of each NFT series on Opensea, only 1%-2% of the blue-chip NFTs with a circulation of 10,000 are for sale in the market. If these 1,729 BAYCs were purchased by independent real buyers, how could BAYC only have 200 for sale instead of 1,729?

Unless these trading volumes are fake and the chips are in the hands of the dealers who intentionally control the circulation, otherwise, will the BAYC holders who have already made a profit not sell just because of their belief?

Therefore, if we want to sell, and sell quickly at the current price, we must have high liquidity. However, the characteristic of NFT is the fragmentation of liquidity. Each collection has its own market segment, so liquidity is easily lost and cannot be replenished by other existing NFT funds.

What’s more serious is that even if the liquidity of a certain NFT is withdrawn, you will not be able to find out immediately. Unlike FT which has a hard indicator like trading volume, our community often pushes such messages, which are to remind you that a certain coin may have price performance in the future due to increased or decreased liquidity. However, even if the liquidity of NFT is withdrawn or even dead, NFT can still maintain a floor price and even its market value ranking is still high. For new buyers who are unaware of the situation, it can be said that they are doomed to fail right from the start.

The most terrifying thing here is that the dealer can even make your NFT unsellable even after the floor price exceeds your listed price. NFTs are numbered, and they can only place their own orders in a targeted manner, that is, they will not buy the NFTs you listed for sale.

Therefore, especially for investors who have hoarded a large number of NFTs, even if they really guessed the right target, it will be difficult for them to sell it in the end, and it will eventually become paper wealth.

At this point, you may think that the NFT market is a complete scam market. It is difficult for blue chips to return to their peak market value, and it is even more difficult to select potential blue chips. Even if you have selected them, it is not easy to sell them at a high price easily.

Isn't this completely contrary to the dozens of times NFT mentioned in my last show, and a self-contradictory statement? Actually, not entirely. NFT still has its investment value and unique methods. This program is just to pour some cold water on you before you start NFT, so that you can calm down and choose the target. As for the unique methods, we will talk about them in the next issue.

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