What it means to "Bet the Jockey"
What it means to "Bet the Jockey"
and why it matters more now than ever in NFTs.
If you only looked at the markets after the close yesterday it would seem like a pretty uneventful day:
What the numbers above do not show is that at one point the Dow was down 700+ points and the markets officially entered a bear market.
That whole “entered a bear market thing is really just a technical phrase because anyone who has owned just about any asset outside of energy and a few select NFT projects has been feeling the “bear” market all year.
But rather than sit at home and listen to talking heads about why the world is about to end, let’s dive in…
We’ll cover:
A recap of the Permissionless Conference
What it means to “Bet the Jockey”
The Featured Project of the Week
A few months ago, I took the plunge and bought a “Permie” pass to Permissionless’s Conference in West Palm Beach, Fl.
On a scale of 1-10, the event was a 12. The Blockworks team did an incredible job bringing in high level speakers, panels and also creating an amazing experience.
I spent the past several days with 7000 degenz interacting with everyone from a recent Tulane Grad wanting to learn more about the space, a happy hour with Dez Bryant to hear about his mission to bring athletes into Web 3 with Personal Corner (I am going to snag a Maxx Crosby) and to round out the crowd, I ran into a few investment bankers from Morgan Stanley and Credit Suisse (and pretty much everything in between).
In fact, one of the meetings I had was with an executive who formerly oversaw electronic trading development at Barclays Capital. He is working on an institutional liquidity solution for cryptocurrencies and said they are inundated with requests from big banks who are worried they are about to miss the boat.
On a whole, the industry is still in the very early stages.
I was really interested to see the vibe of the attendees as the conference was on a major crypto crash along with the “death of a stablecoin”
Surprisingly, it was incredibly upbeat that could best be described as a humble positivity.
The common theme of almost everyone who spoke at the conference from Vlad Tenov (Robinhood CEO) to Kate Rouch (Coinbase CMO) was, “Time to Build.”
One of the speakers also mentioned how almost every major advancement in cryptocurrencies has been built out of a bear market.
In a bull market it is easy to look smart.
Pretty much anything you buy in a trending space goes up… and up… and up.
When the bear market comes though the tide goes out and many are left holding the proverbial bag.
As many longer term investors know, these are the types of markets where real opportunity presents itself.
NFTs are a unique market, but in a fast moving environment, a project faces many of the same challenges of any public or private company.
The companies/projects that are able to:
1.) Stay alive because they have adequate funding
2.) Be creative and pivot based on a changing landscape and macro environment
3.) Gain market share from the projects/companies who can not
4.) Build a rabid fan base and a strong moat for the future
The companies who can execute on the above are going to be the projects that make it to the Otherside (maybe literally and figuratively once Yuga labs builds it out).
@joshBobrowsky (one of my favorite NFT twitter follows) had an interesting take on the NFT market
To invest in NFTs will require accepting failure, significant losses and embracing consider volatility and most likely will be a situation similar to pretty much any rapidly changing industry.
Similar to investing in startups, most projects won’t make it. So “successfully” investing in 10 projects could actually look something like this:
7 projects are losers
1-2 projects return maybe 1-2x
1 project returns 20-30x
Henry Ford built a lasting brand off the assembly line as people moved from horses to cars and left a sea of competitors in his dust. Fun fact (General Electric actually produced an electric car in 1897).
Amazon came out of the Dot Com bust propelling Jeff Bezos both to outer space and on the world’s richest man list for some time. Hundreds of other .com companies didn’t make it.
And the same will be said for NFTs.
For Every Bored Ape Yacht Club or Moonbird there will be hundreds of other projects that come and go from mint to $0.
Which brings us to the focus of “Betting on the Jockey.”
With the market continuing to change and develop, the person and team behind the project (combined with having a runway of funding) is going to be critical component to being able to “build in the bear.”
So our focus over this current market cycle will be looking for projects that above everything else have a team that we want to bet on and a long enough runway to execute the vision.
Our featured project for this week is based primarily on that investment thesis and is actually my largest holding in terms of number of actual NFTs held. When I first minted the project, it was primarily based on my belief in the founding team.
A quick background on the founder:
He is a first generation American who immigrated from Latin America and ended up building one of the largest and most profitable digital companies in his space.
In the digital marketing space, there are many people who float from one idea to the next (essentially going where the next big thing is) but he stayed focus and helped build a real business that ended up going public last year (one of the first in the industry to accomplish that feat).
Before he launched this product, he personally invested over 7 figures in the NFT space.
He is an incredible community builder and that is evidenced by the positive vibe of the discord.
A few of the risks of the project (and pretty much anything speculative):
All markets (including the NFT/Crypto market) are extremely volatile and facing heavy selling pressure
With any new startup there is significant risk
The project is still relatively new and there is a relatively small number of holders meaning if everyone decided to sell at once the price could drop.
Important Risk Statement: These are JPEGs and inherently risky. As always, Do Your Own Research (DYOR).
Important Conflict Statement: I currently HODL 21 FernDaddy NFTs. A few were picked up on secondary but the majority were minted.
As it is a featured project this week, I will not sell any of my holdings for at least 30 days (and most likely will hold beyond that), but want to be sure to remove any conflict of a short term price fluctuation. Also, to confirm, we have NOT been compensated in any way by the featured project.
So, let’s dig into the featured project:
My main thesis for investing was a “Bet the Jockey” approach and I thought it might be beneficial to share his personal goals on the project:
From the Founder:
FernDaddy was a really exciting project to put together. The idea behind it comes from the name of our company, GRMI Studios. GRMI (pronounced “grimy”) stands for Get Rich Make Impact.
And it was a primary goal to merge NFT/metaverse with real life impact and we accomplished that in the very first collection. The first collection inolves a fern-like character created by an artist I have a long relationship with. 5,000 FernDaddy NFTs exist on the blockchain and each one is responsible for planting 5 trees. In total, we planted 25,000 trees across 5 locations: India, Rwanda, Mexico, Pacific NW and Haiti. What’s amazing about that is when you buy your FernDaddy, all of that information is forever recorded on the blockchain.
The next project is already underway and will have a huge impact on a very serious problem the world is facing today. I can’t get into the details with you yet but I can tell you: It’s Big… Too big. Which is why we are partnering with groups that have vast experience with this particular problem.
All NFT projects launched by GRMI Studios must have some sort of impact and giveback. And, in the age of the “rug” I decided it was important for me to pre-fund the impact projects before minting a single NFT. The way I looked at it was, how could I possibly ask you to believe in the particular mission if I didn’t put my money where my mouth is. Just like I planted the 25,000 trees before launching FernDaddy, I will once again pre-pay for the next impact project.
Of course, it’s not just about making impact but also about having fun. We have a few really cool things we’re working on as surprises for our Hodlers in addition to IRL meetups at major industry events, boat days in Miami or invites to the suite at Miami Dolphins games.
Finally, I strongly believe this new technology can be a force for good. I remember buying my first Bitcoin and thinking, “wow, this will change the world.” While that’s true, it’s not the technology that changes the world, it’s us. The people behind the technology. That’s the reason why GRMI Studios is committed to being the Impact and Giveback NFT Company.
Another thing that is common in some NFT Discords is constant talk of floor price and FUD (fear uncertainty and doubt). As someone who is currently in about 20 different discord groups, I have to say that there is an extremely positive “community mission minded” vibe in the FernDaddy discord.
That positivity comes from the group and the type of culture that the founder has built.
The goal of our “Featured Projects” is to help our readers learn more about different teams, projects and ways to get involved in the space. Whether someone buys something or not, we hope it is helpful and educational as you dive deeper into the Web 3 world.
If you are looking for a positive community, a relatively low priced project and the opportunity to back a Rockstar founder who was “first money in”, then I would check out the FernDaddy project. Their discord is currently open so check it out and get to know some of the other hodlers from around the globe as well as the Captain leading the ship - https://discord.gg/grmi
To become a FernDaddy HODLer - https://opensea.io/collection/ferndaddy
We hope you enjoyed this week’s writeup and if you want to get more updates like this for free be sure to subscribe:
To the Moon (or maybe not),
MB
P.S. Next week we are going to dive into the AR world :)
I don't usually write about my specific positions, but these Fern Daddies are my largest NFT position by number held too.
I'm also a big holder in Coalition Crew 2.0 for very similar reasons. (14 v 30 held but floor is higher so $$ position size is similar)