📈Investing tips from a certified millionaire

June 22, 2022

What up, family, 👨‍👩‍👧‍👦

Seedphrase Daily here 👋. We’re the ones that keep it real with you when it comes to NFTs and Web3.

Today’s estimated research time is 4 hours and 2 minutes condensed into a read time of 3 minutes and 15 seconds. Stay tuned to where we talk about:

  • 💸Using your NFT to make yourself more money.

  • 📈Investing tips from a certified millionaire

  • 😅RR/BAYC project update!

  • 👨‍🏫Bear traps and how to avoid them

💸Using your NFT to make yourself more money.

Despite most NFTs being illiquid, NFT lending has become a popular solution to accessing more cash. NFT owners can collateralize their NFTs in exchange for cryptocurrencies or fiat, and the lenders who invest in NFT-backed loans can earn higher returns than traditional crypto-backed loans or peer-to-peer (P2P) loans.

The two largest peer-to-peer NFT lending marketplaces are NFTfi and Arcade. They have done over $40M in BAYC loan volume!

NFTfi reported that BAYC NFTs had had the highest cumulative total loan volume on its platform, with an average loan size of 38.39Ξ. In May, they registered the highest number of BAYC loans on NFTfi at 95 loans, with the largest borrower putting his BAYC #591 as collateral for 122.9Ξ.

With BAYC liquidity at an ATH, holders use their Apes as collateral loans to build during times like these!

On June 19, 2022, Bored Ape #3692 was used as collateral to receive a loan from NFTfi. With a duration of only 14 days, what do you think he’s using it for? Maybe he needed it for NFT NYC.

This brings us to our main point: the NFT community lacks the liquidity to make other investments in this current market. A lot of people who hold apes are NFT-rich and cash-poor, and NFT collateral loans are the solution to that.

However, there’s always a slight risk. If you cannot pay your loan back, your NFT will be lost. So if you are doing this, make sure you have a plan before blowing your loan at the club. What would you do if you took out a 100Ξ loan? 🧐

📈Investing tips from a certified millionaire

Alex Becker is one of the most prominent NFT influencers in the industry. With years of experience, the way of his success was founded on the principles of his investing strategies.

He is a firm believer in Dollar Cost Averaging.

What is that?

DCA is a classic investing strategy that allows you to focus on long-term goals instead of being concerned with ups and downs in the daily market. DCA is when you take an overall amount of money you want to spend and invest small increments of it over a certain amount of time.

Why do this?

No one can predict the bottom or the top of the market, but having an entry and exit strategy will help you make money within the next run. The goal is to minimize the impact of short and long-term volatility. It also allows you to look at things less emotionally because you add smaller amounts of money over time.

Lump-Sum vs Dollar Cost Averaging.

Lump-Sum money is a strategy where money is being dumped at a specific period in time instead of slowly making investments over time.

The example above demonstrates the two.

While it may not enhance your overall return, one is achieved through a unique strategy. Going with either strategy will ensure you similar end gains. The vital segment is ensuring to continue to invest money through a period when prices are low.

An example; is someone whose dollar cost averaged into bitcoin by purchasing $5 weekly in 2020 would have accrued $692 from a $275 total investment, providing a 160% return.

😅RR/BAYC project update!

Yesterday's email covered the RR/BAYC project and why they even named themselves that. Long story short, as of today, it has been removed from OpenSea! They are circumventing the DMCA process now, claiming a violation of trademark. It's pretty clear that the RR/BAYC logo is parody and commentary and protected under the 1st amendment. Moreover, their logo application is still pending. Did you buy this project? We always talk about the risk of derivative projects and how you can lose money as quickly as you make it.

👨‍🏫 Bear traps and how to avoid them

A bear trap is a coordinated selling by whales to create a temporary dip in an asset's price. It is important to identify signs of a false reversal, a momentary directional change in the price direction, before resuming the underlying trend to avoid falling victim to them.

How do they do this?

Similar to other assets, by coordinating amongst each other, the collective selling of a particular token causes its price to fall. It influences other retail participants to believe that the uptrend is over. Many investors may sell their holdings as a consequence, and they lose money as a result.

What can we do to avoid getting caught? 🧠

We can recognize a bear trap by using charting tools available on trading platforms like TradingView. Using indicators such as RSI, Fibonacci levels, and volume indicators, they are likely to confirm whether the trend reversal after a period of consistent upward price movement. Ensure the downtrend is driven by high volume to rule out the chances of a trap being set up. Have you seen these setups before? Looking at and analyzing charts can be a good practice to spot them for the future.

Another way would be DCA. Rather than investing all your money initially, if you DCA you’ll have the opportunity to get a better price average, if it is a bear trap then you can take action to buy that dip rather than watching your money go down. No indicators needed. 😎

Short NewSeeds ;

That’s a wrap! Do you think crypto loans are the future? We might even start seeing people taking out ETH loans to pay off houses ahah.

Make sure to follow us on Instagram and Twitter for more up to date content! Also, check out our NEW Youtube Video where we discuss hot topics and some potential calls if you’re too lazy to read :) Make sure you subscribe because at 1000 subscribers we are going to be giving away 1Ξ to a lucky person!

See ya tomorrow ✌️ 💎

Meme of the Day

All that to get swerved, better luck next time 😳

Disclaimer

None of this is financial advice. This newsletter is strictly educational and is not investment advice or solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research!

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