STRATEGY: Flipping Doggos and Cats
Mr. Fox walks you through an NFT trading strategy that has worked time and time again for growing low amounts of ETH.
Hello all and welcome back to another email. Today I present to you a strategy you can use to grow your ETH. It is incredibly actionable and consistent.
I am involved in a number of different groups where the conversation almost always revolves around the idea of what NFT projects to buy in order to make the most amount of ETH in the shortest amount of time.
Oftentimes though, one can make great money finding deals or executing basic logical trades that are clear and easy for everybody to see.
One of the clearest patterns I’ve seen throughout my four months in the Bored Ape Yacht Club is the one I will outline in today’s episode.
Everytime the Bored Apes go through a period where their floor price skyrocket, demand intensifies, and the volume increases heavily, there is a trade that anybody with the capital can execute on that is such easy money, it is almost “free”.
In English, what I am describing is a period where the cheapest available Bored Ape increases in price by 50%, 100%, or even 200% in a short amount of time. This quick increase in price, caused by a new wave of demand, creates great deals for smaller collectors.
These deals are created by the knock-on effect of rapid prices in BAYC. When prices increase quickly for Apes, their sister collection, the Bored Ape Kennel Club, lags behind it. Once the Apes finish their move up, everybody starts looking around to see where else they can put their ETH to make a return. And what do they find? The Bored Ape Kennel Club. Historically, BAKC prices lag behind BAYC prices by 1-3 days.
Take a look here at the 90-day sales charts for BAYC and BAKC:
Where Ape sales hit their peak volume on July 16th, Dog sales didn’t do so until July 19th. If we keep looking across, although they hit another volume peak on the same day of August 4th, Ape sales began heating up before that, while Dogs had not. If you were attentive, you could’ve got in on the move.
So, if you only have a small amount of ETH, keep your eyes glued to BAYC prices. As soon as you start seeing some rapid momentum, consider getting a Doggo.
As a heads up, the BAYC floor is going to really heat up in the next two to three weeks as people anticipate the newest addition to the club - Mutant Apes. Nobody knows how they’re going to function, which makes the hype all the more intense. Right now is a great time to get yourself a Dog with the floor around 2 ETH.
I bet if you submit a bunch of offers below the floor at 1.7-1.8 ETH, you could probably get a Dog at a discount. I expect the Dog floor to get to 5 ETH by the time the Mutant Ape hype has reached its peak, so you may want to consider selling a little earlier than that if you’re thinking about buying one.
Now we can go one step further if the the circumstances are right. The NFT market experienced something for the first time a few weeks ago. As Ape sales flew off the shelves at record rates, we actually saw the prices of non-BAYC related projects increase as a result. It was not just the BAKC Dogs that received a nice bump in price as a result of the Ape hype, but other unrelated projects such as Gutter Cat Gang and Cool Cats as well.
Let’s take a look:
Despite previously uncorrelated charts, on August 3, when BAYC had its record day in volume, so did Gutter Cat Gang and Cool Cats (well, their second at the time). Point being, if BAYC goes on a run, buy a Dog. If BAYC goes on one of its biggest runs ever, make sure to check out other projects too, because they will most certainly feel the knock-on effects as well.
That’s it from me today. Short and sweet but more practical than a lot of what we’ve discussed before.
As always, do your own research. This should not be considered financial advice. I am simply highlighting market patterns.
Feel free to reach out on Twitter @f4ntast1cmrf0x as many of you have or via email.
And down the Rabbit Hole we continue.
Mr. Fox
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