The cliché on Wall Street is that “no one rings a bell at the top or bottom of the market.”
In crypto, they don’t either. But…they might Bonk your wallet.
Yesterday, I shared with you the story of an “airdrop” that saw a bunch of free crypto tokens called Bonk land in my wallet. I sold them for $475, though had I been patient and waited 72 hours, they’d have been worth nearly $4,000. Free money is free money and I’m not complaining about $475…but missing out on another $3,500 does sting a tad.
Anyway, we pick up today with the second half of that story…an NFT called BONKz.
But first a couple of quick definitions, in case this whole crypto/NFT world seems like just a whole lot of meshugas—and frankly it can.
An NFT is a form of crypto, but instead of being something ethereal and unseen like bitcoin or any other traditional cryptocurrency, NFTs are visual creatures. They’re basically digital art you can see. Increasingly, the art represents ownership in a real, underlying business, somewhat like a share of stock.
An airdrop, meanwhile, is basically a freebie, in which a project sends something of value to crypto/NFT owners at no cost. You wake up one day and you see something new in your crypto wallet. It’s sort of like the old tradition of banks giving away a toaster with each new account…only imagine it’s a toaster you can resell instantly for hundreds or even thousands of dollars.
When I sold my BONK tokens for $475, I thought that was that.
Turns out I was wrong.
I saw on Twitter that the team behind SOLGods, a high-profile NFT I’ve owned for more than a year, was launching a collection of 10,000 BONKz NFTs to pay homage to the sense of community the Bonk token unleashed. The BONKz NFTs literally have no purpose other than to be profile pictures—digital art the owner might use as their picture on their social media profiles.
No purpose…no roadmap to the future. Just a picture.
As a SOLGods holder I was eligible to claim two BONKz for free. So I did.
Everyone else who owned Bonk—roughly 117,000 people at that point—got to fight for the right to spend $25 on the few thousand BONKz that remained after all the SOLGods owners had claimed theirs.
The project fully sold out within a few minutes…and a few minutes after that, they’d shot up in value to about 20 Solana, or $320 at that time.
Such quick profits in what has been such a sour market prompted me to immediately sell one of my BONKz. I sold at 17.23 SOL, basically a free $276, which I will happily pocket in this market.
With my $475 in Bonk tokens and my two BONKz NFTs, that means I was given a little over $1,000 worth of crypto, at no cost.
I still hold my other BONKz, now trading at about 13.5 SOL, or roughly $340 since Solana has pushed into the mid-$20s. I’ll continue to hold because a community has built up around BONKz and they’re looking to actually build a use-case and utility for the NFT. We shall see what comes of that effort.
But the ultimate point here is that Bonk and BONKz feel like canaries in the coal mine—or, rather, the complete opposite of that, since the dying canaries were an ill omen.
The excitement that surrounded BONK and BONKz, and the fact that both are holding up decently in the secondary market weeks later, would seem to indicate that the mentality in the crypto market is shifting.
The dark clouds that hung about for most of last year appear to be lifting. Not only are the animal spirits rekindling on Solana, but bitcoin, the benchmark crypto, is flirting with $23,000, a level not seen since last August. Ethereum, meanwhile, is up more than 50% since late November lows.
We could, of course, see all crypto push lower again, depending on what the Federal Reserve does at its first 2023 meeting next week. But my sense is that the bottom is in.
Recent lows are the lows for the bear cycle.
The Fed is clearly in slow-down mode with its rate hikes, and there are hints that it could simply stop raising rates very soon and, possibly, have to cut rates depending on how 2022’s aggressive rate hikes continue filtering through the economy.
Either way, brighter days in stocks and crypto seem imminent.
Meaning now is a good moment to begin wading into crypto, and picking up quality projects on down days, because in time they’re going to see prices that are multiples higher than today.
This isn’t me ringing a bell at the bottom.
This is me Bonking you on the head.
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