But I Plan to Keep Buying NFTs Anyway
“Sometimes you win. Sometimes you lose. Sometimes it rains.”
We begin today by stealing one of the best bits of dialogue from one of my favorite, can watch it again and again and never get tired of it movies…Bull Durham.
But we’re going to apply that quote to another of modern life’s games: Investing in non-fungible tokens, or NFTs.
I’ve been telling you a lot recently about these unique, one-off, one-of-a-kind crypto that are popping up everywhere—from art to venture-capital investing.
And I have been showing you the outsized—frankly, ridiculous—gains I’ve made in several. (You can read about some of my NFT gains here and here.)
And I have read the emails from readers who want to know more about how to do it—how to find, research, and buy NFTs. A two-part series is coming soon on that, as well as an analysis of a recent NFT I bought and why it has moved in price from 1.5 Solana ($300) to 54 Solana (nearly $12,000) in about four days. (Solana is a cryptocurrency widely used in the NFT space.)
But today I want to focus on the Bull Durham quote. Because the reality of investing in NFTs is that sometimes you lose and sometimes it rains.
Sometimes the seeds you plant don’t blossom into roses because either they were duds (it rains)…or because someone came along and stole your seeds (you lose).
Over the weekend, I participated in a much-watched NFT launch called SolanaBankBox. The pitch was simple and alluring: Earn passive income of between 0.5 and 2 Solana per month (at time of writing, $110 to about $440).
The company had a plausible roadmap, a whitepaper explaining the project, and a funding plan tied to crypto-mining and sponsorship deals…pretty much the whole shebang.
There were a few red flags, to be sure. But I’ve learned across nearly 40 years of investing that sometimes red flags are just the red banners of opportunity marching toward you.
Sometimes you have to take a chance.
I took a chance with Bank Box…
I minted one Bank Box for myself, and one in a crypto-wallet I share with my landlord, Peter. I was in for a combined 1.5 Solana ($300), and Peter was in for 0.5 Solana ($100).
I suspected problems immediately. I opened my wallet to see that I had minted two Alien Boxes, the rarest of the four boxes available, and the one that would pay out the most crypto every month. That’s uncanny luck…of a sign of something shady.
I’ll save you the buildup. There was no plan to pay out Solana to the owners. It was simply a scam.
I was “rugged,” as they say in the NFT world, meaning I had the rug pulled out from under me.
It turns out the project’s founder was a sociopath. I won’t go into all the sordid details. I will only say that even after it became apparent this was a rug, the founder was active in the project’s chatroom apologizing to members for the screw-up, promising to make things right, laying out a plan to repair trust with the Bank Box community.
Most common pond scum quickly skedaddle with the cash. This guy—he was still engaging with the community and trying to quell fears.
A sociopath.
As much as it sucks to get rugged—even when you see the red flags—the reality is that this is part of investing in the cryptosphere. I want everyone to understand that.
This is, in many ways, the Wild West, and you have to accept that if you want to play this game.
You either decide to avoid the risk entirely and stay away from NFTs. Or risk a bit of capital because of the massive gains that are possible.
But here’s the good news: Figuring out the good projects from the bad is generally pretty easy.
The vast majority of NFTs I disregard immediately because it’s obvious that they have no on-going utility.
The really solid projects stand out and I try to focus 95% of my efforts there.
While those like Bank Box that could be a big win or a total loss, well you take your chances.
And sometimes you lose.
That said, I will definitely step back up to the plate for another swing. I mean, in the last two, major NFT mintings that I participated in, I’ve turned 9 Solana (about $1,800 to $1,900, based on the price at which I bought Solana) into 178 Solana at the moment—nearly $40,000. That will go much higher because of what these projects represent.
So, I don’t mind putting a few Solana at risk when I know more gains like that are out there.
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