Betting through NFT is the best way, and the best NFT is Node Monkes.
Written by: 0XKYLE
Translated by: DeepTechFlow
One of my recent confident investments is Node Monkes, a 10k PFP collection on Bitcoin that has attracted the attention of top artists like Jack Butcher and Beeple.
While I admit that I may have taken a bit of a gamble on this bet, I have good reason to believe that Node Monkes will be one of the best-performing NFTs in this cycle.
You may be skeptical of this trade because it is an illiquid NFT rather than a liquid meme coin, but my counterargument is that as a profit maximizer, I will accept any asymmetric bet I see.
But before I sell you on my investment portfolio, as a first principle maximizer, we must delve into what constitutes a good NFT.
About NFTs:
I don't consider myself a great NFT trader, but I do have experience in NFT games. My first transaction on ETH was for a Loot derivative that I paid 0.4 ETH for. Most of my early experience in the crypto space was with NFTs, so it's not like I know nothing about it.
NFTs are more illiquid meme coins. With this analogy, it is possible to build a framework around "what constitutes a good NFT." Therefore, here are the most important factors I believe constitute a good NFT:
Does this series have a strong narrative first?
Yes, even for NFTs, there is a narrative. If you were here in the last cycle, you will remember that we had multiple narratives, such as pixel art at one point being the main narrative (Kaijus, Cyberkong, etc.), then you have game NFTs (Wolf game), PFPs (Azuki, CloneX, BAYC), and many others.
Even recently, we just experienced a SOL NFT frenzy as the main narrative for SOL NFTs. Therefore, for an NFT to be popular, it must form some kind of collective belief in the ecosystem. You won't see AVAX or Tezos NFTs performing well because there is no narrative.
Who are the buyers and sellers?
This is the importance of the "community." For an NFT project to be successful, you can't have people wanting to flip. Just as for a good token project to be successful, you can't have buyers wanting to sell at 1.5x returns. These people must be long-term participants. In simple terms: more buyers than sellers.
However, you can think more deeply about how to judge a good community for an NFT project. Although I cannot provide any quantitative data, there are many factors that go into this judgment:
Artistic level
Regardless of which NFT it is, the art must be decent and not a replica of other existing art styles. Just as the beta version of a meme coin always performs poorly, replicating the art style of a major project (e.g., Ordinal Punks, BTC Degods, etc.) is extremely unpopular.
For PFP projects, this is even more important because PFPs are "social proof of wealth." Flaunting a replica of a major project is like getting caught renting a Lamborghini in an Instagram photo instead of owning it.
Are there whale purchases? Are people buying to hold rather than to sell?
People like to follow smart money, and in NFT projects, nothing indicates smart money more than high-value sales. Golden BAYC sold for $500,000? CryptoPunk sold for a million dollars? These sales give collectors a "prestige," knowing that wealthy individuals consider their NFTs valuable.
These high-value sales are not limited to rarities. For regular PFPs, sales above floor price are one of the best indicators of buyer sentiment. When a PFP project continues to have people buying above floor price, it indicates that buyers are willing to pay a premium for what they actually own.
Do people like the project on social media?
NFTs are a game of attention, and for PFP projects, there's nothing better than seeing many people showcasing your collection. Remember when everyone had an Azuki, or a Cryptopunk, or a Bored Ape for a while? PFPs have a lot of potential in terms of attention, and you always want to see many people showcasing your PFP for it to gain any significant long-term appeal.
Can the NFT project survive a downturn?
Just like tokens, all NFT projects will eventually face some kind of downturn. The initial hype followed by a downturn is the watershed moment that determines the life or death of an NFT project. Many NFTs cannot survive when attention wanes because people rush to exit, but if you have a strong holder base, people who genuinely enjoy collecting JPEGs, you will see sustained bullish price action.
Other factors
Then you have some smaller factors, such as:
Team: Are they anonymous? Do they have a bad track record?
While there are no rules saying anonymous developers are better than named developers, I have observed that sometimes not knowing who created a collection makes it perform better. I think this is more of a "tail risk" factor, knowing the artist can bring more negative impact because if they are proven to be a serial scammer, you can bet the NFT is doomed to fail. But not knowing who the developer is doesn't mean it won't succeed. Unless the artist is famous, not knowing who is behind a project usually doesn't have as much upward momentum.
In this regard, using a pseudonym seems better.
Catalysts
This is a double-edged sword. Depending on the project, it might be best to do nothing at all - for example, if people are collecting NFTs based on "potential catalysts" rather than other reasons (like liking the art), you can bet that once the catalyst is over, the prices of these NFTs will drop.
There may be many other factors, but these are the ones I consider most important. Now that we know what constitutes a good NFT project, let's take a look at the bullish view of Node Monkes.
Send Nodes
Overall narrative
The explosion of the BTC ecosystem in 2024 will be self-evident, just like the ETH ecosystem in 2021.
When I tell people this, the first reaction I always get is, "Why not SOL? Why BTC?" I believe the chain itself has an "atmosphere." The best advertisement for a chain is: rising prices.
In 2021, we had so many on-chain tokens and NFTs on ETH just skyrocketing. However, in the past few months, Solana has not had the same wealth effect, although SOL has some outstanding collections, SOL has not gone as crazy as we often see on ETH.
I'm not saying SOL will die, or that you don't have some crazy trades (you do, like Madlads, tensorians, WIF, etc.). But meme coins on Solana often peak before reaching a $1 million market cap, and on Solana, every additional SOL added to an NFT collection is discounted, and so on.
You also see the same situation on Arbitrum, where low gas fee chains seem to have encountered the same problem.
But compared to BTC, it doesn't have the same asymmetry. BTC simply makes this argument self-evident, it has a heritage. It is the father of all cryptocurrencies. And BTC holders haven't had much to do on-chain for the past decade, while ETH had their DeFi boom just 3 years after creation.
I believe the narrative of BTC is much stronger in this regard. There is so much money on Bitcoin, it's incredible to me that the BTC ecosystem wouldn't be popular. Look at the BTC Degods NFT series, and you'll see people paying 1 BTC to buy a meme JPEG. It's insane.
Furthermore, bridging, storing, and figuring out how the BTC chain works is a hassle, which is a good sign that many people will fade the trade before it's too late. This reminds me of Canto in 2023, when people just thought bridging was too hard, and since then, Canto NFTs have risen 100x.
I just think the BTC ecosystem is a continuing narrative with greater upside potential, and NFT collections that dominate on BTC will undoubtedly be worth hundreds of millions of dollars.
Node Monkes Stands Out Among All NFTs
First-mover advantage and the right timing.
Node Monkes is the first original PFP project on Bitcoin. It garnered crazy hype in the first week, and despite FUD, it created a strong holder community that believes in it. Sub-communities have formed around them, which is a good sign for long-term holders.
Launching in a bear market would be suicidal for many NFT projects due to insufficient liquidity in NFTs. Launching too early on BTC is also not the best, but Node Monkes seems to have launched at the right time with sufficient infrastructure, but not too late to be oversaturated.
Low Number of Mints
The number of mints is important for Bitcoin enthusiasts, many of whom are willing to pay a premium for the first hundred mints. Node Monkes benefits greatly from this, being the first 10k PFP mints on Bitcoin.
High Artistic Level
Most importantly, among all existing collections, Node Monkes is original. In the top 10 collections ranked by trading volume, many are derivatives of other projects, such as BTC Degods, Ordinal Punks, Dogepunks, etc.
Node Monkes has put incredible thought into their art, with features like Asic miners as hats, Hoodies and Aliens as a tribute to CryptoPunks, Gold as a tribute to BAYC, and Peer representing "peer nodes." The artistic level is very high, as evidenced by frequent trades above floor price.
Whales Like It
I can't remember the last time I saw someone spend over $80,000 on a JPEG. However, we have already had multiple sales exceeding 1 BTC.
Spread
Many influencers can be seen owning a Node, and renowned artists like Beeple and Jack Butcher have expressed support for Node.
They have made honorary awards for famous NFT influencers (Claire, etc.).
As I mentioned above, attention is something the NFT market heavily relies on. The survival and breath of a project depend on attention, and I have never seen a valuable PFP project not have some kind of crazy community on Crypto Twitter.
NFTs are Easier to Bet on Than Tokens
Currently, I don't think there is a leader in the BTC ecosystem. In the AI sector, TAO can be called a leader, and Gamefi has PRIME. But BTC has a bunch of "meaningless things" like ORDI, TRAC, MUBI, SATS, etc. While people talk about ORDI being the leader of the Bitcoin ecosystem, I think betting on NFTs is much easier.
NFTs are easy to understand and a good way for Bitcoin holders to flaunt their wealth.
Trading Risks
1. Node Monkes being surpassed by a new or existing collection
Here is some competitor analysis:
BTC punks: Non-native, derivative
Onchainmonkeys: with 250k mints
Bitcoin Frogs: nearly 500k mints
OMB: possibly the best chance due to having a decent community, but ultimately, it's a punk derivative, diluted in 14 million mints
Taproot wizards: also another decent bet due to the founder, I think it's a collection with asymmetric risk/reward
Dogepunks: Fusion derivative
2. Node Monkes unable to survive a downturn
When Beeple released his Node Monke art, that was the signal of the peak, as at that moment, there were no new buyers. Anyone who didn't know what Node Monkes was now knows, and the price started to stagnate.
We have now dropped over 30% from the all-time high, currently at around 0.17 BTC. While I believe the worst of the downturn is over (we have seen encouraging tweets and attacks on the founder, classic signs of a bottom), I don't know what the catalyst for a quick rise is.
We may stay in this range for the next few days/weeks, but I think this builds antifragility; sellers are out: those who wanted to sell have sold.
Instead, what we are left with are people who have faith in the ecosystem. If Node Monkes sees another rise, I believe this will be a signal that it is a collection NFT that will persist.
Concluding Thoughts
Overall, I think this trade has two aspects:
The BTC ecosystem is an asymmetric bet
Betting through NFT is the best way, and the best NFT is Node Monkes
I could have played better by selling at the Beeple peak and buying in on the confirmation signal instead of holding like a fool, but I'm not that good. All I can say is these are my genuine thoughts on Node Monkes, and if this article has piqued your interest, you might want to keep an eye on the floor price.
As I said, while I believe the worst is over, this lull period could last from a few days to a few weeks and will be a huge test for Monkes holders.
That's it - I hope you enjoy this paper!
P.S.: If you're interested in rarity rankings, the rarities are: Hoodies / Aliens / Gold
Some nice skins: Ducks / Deathbots / Robots / Crown
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