Over the last week I’ve been on a shopping spree allocating some ETH to NFT’s.
My highest conviction bet in this space is the original Gen Zero CryptoKitties from 2017/2018 for the following reasons.
Historical Significance
CryptoKitties were pivotal in blockchain and NFT adoption, marking the first time I remember Ethereum network congestion due to mainstream interest, the cute cat jpegs brought NFTs and Ethereum to a wider audience outside of nerdy devs.
Supply and Scarcity
The hard limit of 50,000 Gen0 CryptoKitties is higher than other blue-chip NFTs, leading to slower absorption by long-term holders, which I believe is still playing out as people like myself are coming in and taking them off the market. Over time I believe the scarcity will become more of a factor leading to price appreciation.
Market Liquidity
Gen0 CryptoKitties are more liquid than many other NFT projects, with multiple platforms available for buying and selling, including OpenSea, CryptoKitty Official Auctions, and NFTX Kitty Vault. The NFTX vault is particularly useful for instant liquidity when buying/selling at floor prices.
Affordability
The higher supply and lower price point of Gen0 CryptoKitties compared to Punks and Apes makes them more accessible to a wider audience. There are significantly more people that can afford a Gen Zero CryptoKitty than can afford a $80k Punk. There is also the wide tail of lower priced second and third generation NFT’s which can act as an entry point for investors that might go on to purchase a gen zero cryptokitty.
Brand Appeal
Cats on the internet will be a thing past, present and future. These don’t have the same appeal as profile pictures but are more akin to digital Pokémon cards, appealing to collectors rather than being used as status symbols.
CryptoKitties marked the height of the first NFT boom in late 2017, Apes perhaps captured the attention in the second 2021 boom. If I am right in my thesis that NFT’s are here to stay and will draw attention cyclically we might see another boom or two in the next decade.
If that happens all marketplaces are priced in ETH and I would expect it to coincide with a wider crypto bull run. This creates huge potential for appreciation in US dollar terms as I’ve discussed here:
https://jamesbachini.com/cryptokitties-investment-thesis/
I’ve also purchased some other NFT’s which I just liked from an aesthetic and tech perspective.
Damien Hurst The Currency - UK artist, interesting concept of physical and digital art options
Avastar - Early generative profile pictures which contained the SVG code for the image in the contract
Bonsai - Zenft Garden Society, I thought they would make a good digital canvas for the office at some point
Hashmasks - I like the ones with a latino feel for same reasons as above
Chainfaces - Another early generative NFT which contains ASCII smileys, the Nokia of NFT’s
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Bitcoin and the wider crypto markets are starting to move into the “We are so back” zone. Until it trades above $70k and makes a new all time high I think we are still in chop territory and will continue to be patient.
I’ve spoken before about the summer lull in attention and trading volumes and this is continuing to play out. There’s a week left of summer to get your bids in and position the portfolio for what I hope will be renewed interest, new all time highs and bull market propaganda for the remainder of 2024.
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