WTF are NFTs?
The HYPE came slowly and then all at once. Non-fungible Tokens (NFTs) first made headlines in 2017 when Dapper Labs' game CryptoKitties accounted for 95% of Ethereum network usage at its peak. Someone paying $170,000 for a digital cat seemed like an anomaly in 2017. What's happening today blows that headline out of the water. It started with the Nyan Cat meme, which sold for a jaw-dropping $590,000.
The artist Grimes auctioned off a ten-piece collection of her artworks which selling for $5.8million. Another artist, Beeple, sold an animated gif of Trump's naked corpse for $6.6million, setting a new record for the most expensive single piece of digit art. Beeple swiftly blew his own record out of the water after Christie's launched a two-week sale of one of his works. The piece called 'Everydays: The First 5,000 Days' sold for an unfathomable amount of $69.3million. The third-highest auction price achieved for a living artist, after Jeff Koons and David Hockney. The interest in this NFT space is clear to see from the monthly crypto art volume seen below.
NFTs are this year's HYPED up way to become an instant bazillionaire. Previously we've seen Forex, cryptocurrencies, sneaker re-selling, the list goes on. Every year we see a new trend emerge of how to get rich quickly, and this year it's safe to say the award can go to NFT's. So, WTF are NFT's and why should you care?
To understand what an NFT is, we first need to breakdown the words. 'Non-fungible'. Non-fungible simply means an asset that isn't interchangeable. An example of a fungible asset is a £50 note. All £50 notes in circulation are interchangeable and worth the exact amount. For a non-fungible asset, let's use a watch, a Rolex Daytona with a green dial, as an example. You and your friend could both own visually identical watches, however, the value of each will differ based on the year, condition, service history, etc. If you swap your £50 notes, the same exact value will be kept during the transaction. If you swap the watches, that value won't be held intact, and one of you will lose value during this trade. Lastly, there are 'tokens.' These are tradeable digital assets that exist on a cryptocurrency blockchain, mainly via Ethereum but other cryptos also support it.
The blockchain technology these NFT's are run on is what gives them their appeal. Blockchains prove the ownership of a token, and it's nearly impossible to undo a transaction after it's been written into the blockchain. Once a token is purchased, it's forever shown on the blockchain and not only proves ownership but all authenticity of a digital asset. This removes many issues that arise in the traditional high-end art space where we commonly hear stories like Netflix's 'Made You Look', a true story of $80m worth of fake art being sold through one of the most established dealers in history. Not only can you not replicate an NFT, but you can very simply trace it back to the original artist.
NFT's could revolutionize the creator economy if they become more than a fad. What's happening in the NFT ecosystem today is nothing short of a paradigm shift for a maturing sector of cryptocurrencies, however, there's no denying the vast majority of buyers are here to speculate. As this increased demand signals interest, it is highly reminiscent of the 2017 ICO bubble that caused the market to crash many years ago. Out of this multi-year bear market, several strong products and companies have proved they're here to say. We feel it is likely a similar story will follow for NFTs. Until then, it's important to state this digital content does have value, and its prices are being driven by simple supply and demand, much the same as any other asset class.
Opportunity of the week - GBP
The currency market has opened up this week with several pairs giving significant gaps upon market open. With a considerable amount of opportunity in currencies currently, it was a task to choose our favorites. GBP weakness was one of our top watchlists last week. After gapping open, giving us the breakdowns we have been waiting for, we simply waited for pullbacks to our confluence areas to occur over the London session before executing.
I, Jonny, personally watched GBP/CHF, EUR/GBP, and GBP/JPY as my top entries. GBP/CHF and EUR/GBP are extremely heavily correlated, both gave fantastic setups, meeting our strategies, and I went short on GBP/CHF. The position currently runs at over +2.25% profit as it broke previously daily lows, and I have removed all risk from the position, letting it run to my max target.
Currencies: Further GBP weakness and inversely CHF and JPY strength across the board.
Crypto: We await BTC to break to the upside, continuing its bull run. This breakout will result in a mass of opportunities across altcoins. Some of our favourites were covered in Friday's Insights episode.
TMC Club - Initiative will always pay dividends
When you look at the most successful individuals in any field, you will always find a similarity behind their actions. One of those similarities is using their initiative. When faced with a problem, they will use the initiative to find a solution, viewing a problem as a challenge and always coming out the other side a more evolved person.
Trading is no different. We can typically see who will likely reach success in this game quicker simply by watching their actions. A great example of this was a recent epic post in our community by Jean-Luc. Jean-Luc created a matrix, using his initiative, that he could use before entering any trade. The matrix he developed systemizes his investment process, removing human emotion and error, increasing his chances of making the correct decision in every scenario. A massive problem for a vast amount of traders is not acting emotionally. This completely removes that chance of making irrational decisions and sets him up for success over the long term.
What's happening this week?
Mon, Mar 22nd @ 2pm PT (9pm GMT)
Market Update w/ Jonny Godfrey
Wed, Mar 24th @ 2pm PT (9pm GMT)
Market Update w/ Jonny Godfrey
Thur, Mar 25th @ 10am PT (5pm GMT)
Chronicles LIVE w/ Irek Piekarski & Jonny Godfrey
TMC Diamond access required
Fri, Mar 26th @ 11am PT (6pm GMT)
Insights w/ Irek Piekarski
All the best for the week ahead- see you in the club!
Jonny Godfrey & the TMC Team