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Don’t underestimate these low-pixel, unartistic, but record and represent historical moments of JPG.
Written by: LilyKing at the border
Colleagues and friends in the private equity world are experiencing a double crit from the collapse of the valuation system. The first heavy blow came from the Internet technology leader that they believed to be a core asset. Every time the market felt that it had been absolutely underestimated, the policy storm came to refresh the bottom line. The second crit came from the JPG that they considered to be an unreasonable bubble-Head NFT .
The floor price of NFT’s top-tier CryptoPunks jumped from USD 10,000 in February this year to USD 450,000 last weekend, and fell back to around USD 400,000 today. And its 24-hour turnover also reached its peak of 143 million US dollars yesterday. Every day and night, it is creating a NFT investment diamond hand with an amazing rate of return.
CryptoPunks latest transaction records
Equity investors tossed over and over again, and they couldn’t figure out why it was themselves who couldn’t sleep well in the dead of night. Those “speculators” who are struggling to join the NFT market even slept soundly with JPG avatars with extremely low pixel aesthetics and extreme marginalization, and they also achieved new asset highs every time they woke up.
As a person who came barefoot from traditional finance and started studying crypto assets day and night, I am also reflecting on my logic of over-provisioning equity assets and under-provisioning NFTs. I have always felt that the bottom of the equity has corresponding tangible corporate assets, companies have visible people, business and income, and JPGs are just a bunch of pixels that represent spiritual consensus, just like a mirror.
Maybe I just overlooked it. Because it is true and visible, there is a quantifiable valuation standard, and historical badges and beliefs cannot set a quantitative standard, so it surpasses the traditional valuation system .
Who is the stronger underlying asset
The underlying assets of equity investment are the company’s founder, team, and business. Companies have many unpredictable risks: poor management, market competitors, technological iterations and even subversion, changes in the policy environment, employee scandals, and so on.
The bottom layer of JPG like CryptoPunks is the historical moment of Crypto . Its unique historical position cannot be copied, rewritten or erased. Its founding team Larva Labs will not affect its historical writing even if it becomes worse and worse in the future. Its value as a historical badge will only increase over time.
Most companies who want to be friends of time need to make great efforts and get great luck, and CryptoPunks’ JPG does not need to do anything to become friends of time. As long as there are believers in Metaverse , then it is the creation of Metaverse. Antique .
Market volatility: the investor community agrees
The seemingly worthless JPG investment decision is actually a system that requires more insight and rationality for investors . It requires investors to not only calculate past data but also calculate world changes .
There are many high-net-worth individuals who invest millions of dollars in stocks, but most of them are unstable and have high expectations for high returns. There are not many investors who spend millions of dollars to buy a JPG. Most of those who can spend these ETH have the belief in Crypto and do not expect to make money from JPG at the beginning (although they have recently earned expectations because they have earned too much). Such investors also have the best risk resistance and mentality when the market turns cold, and they will not sell at low prices due to liquidity pressure. When investors in the stock market encounter market volatility, they are prone to panic selling, causing greater fluctuations in asset prices. Of course, crowdfunding and fragmentation of the JPG market may have an impact on volatility in the near future.
Unvaluable faith and social capital
In addition to financial attributes, JPG assets also have social functions, identity auras and cornerstones of belief that equity does not have. Buying a company’s stock does not bring you a special status, nor does it bring changes in your social circle, unless you hold a controlling stake and sit on the board of directors, and holding often only means that you or the institution you represent is more financially rich. , There is no noble consensus belief at all. But the top JPG is already a group entry pass for some domestic super-powerful communities. The entry threshold is actually not JPG itself, but whether you have pioneering insight and believe that Crypto can change the world, and whether you have an open space-time view. Incorporate JPG into your own valuation system.
Faith cannot be valued. PE and PB are the frameworks for the valuation of equity assets, and they are also shackles, but beliefs are not bound by these valuation frameworks . And JPG assets will soon be able to mortgage loans and issue derivatives to hedge, just like equity assets. This is an asymmetric opportunity, the risk is controllable (the hedge can be pledged), and the upside is unlimited.
There is no common prosperity in JPG
JPG assets are currently marginal assets, which are less risky than equity assets and do not affect common prosperity. JPG does not occupy the scarce resources needed by society and does not compete with the people for profit. There is no large number of people who will be dissatisfied and jealous because of the uneven distribution of JPG. JPG Investors get ridicule from the public .
Scarcity of smart contract settings
JPG assets are more scarce than equity assets. It is obvious that stocks can be issued continuously. Capital needs scarce assets, and it doesn’t matter where scarcity comes from. The killer application of smart contracts is actually artificial scarcity, and the upper limit cannot be changed.
Viral transmission: social transmission with extremely low cost
JPG assets have stronger communication power than equity assets. For example, NBA superstar Curry just changed his profile picture to Bored Ape Yacht Club (BAYC) . If a company wants to ask Curry to endorse, it will need to pay him tens of millions of dollars in compensation, and he may not be able to persuade him to change his profile picture. During his peak period, Curry was hired to endorse Under Armor at a high price, making Under Armor a challenger to Nike. Bored Apes was able to make Curry willingly endorse them free of charge, and even spent nearly $200,000 in his own pocket to buy monkey heads.
Stephen Curry changed his Twitter profile picture to Bored Ape Yacht Club (BAYC)
In the world of private equity for so many years, we have always been particularly fond of companies that have truly changed the world, from biomedicine to new energy and chip technology. We should continue to invest in them, because they maintain and develop the infrastructure on which our physical bodies and meta-universes in the real world depend .
However, we should not underestimate the disruptive changes to the entire asset allocation and appreciation caused by the advent of the meta universe . In the current era, there will be some new types of alternative assets. Those assets may seem to be the most dangerous and useless things, but the most dangerous things are often the safest, and the most useless things are often the most precious.
So don’t underestimate these low-pixel, unartistic, but record and represent historical moments of JPG. But what I said only applies to a very small number of top JPG assets that have historical status that cannot be copied. Over 99% of NFTs will be worthless after many years.
About the author: As the general counsel, he worked for an alternative asset management fund with an asset management scale of more than 40 billion US dollars. He will soon join Asia’s largest crypto asset custody and institutional asset management platform Cobo as the COO, a Sino-US lawyer, and in-depth research on social policies and collaboration. Mechanism and institutional cooperation framework.
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