It was Christmas eve when I saw this on my IG feed:
Turns out, the buyer was none other than Ethan Lin, NFT investor and Co-Founder of CryptoKnight.
Why on earth did he spend $42K on an NFT during a bear market?!
Working at Dr Wealth meant that I could ask the man himself, so let’s find out.
But first, a quick introduction to this jpeg:
What is the Black Adam?
Black Adam is a key logo of the Adam Bomb collections by The Hundreds. It was created back in 2006 and has grown to become a recognizable icon in the streetwear industry and the skating scene.
Bomb Story: Black Adam is the rarest bomb of all. He is a nod to the legendary Black Adam T-shirt, the most exclusive piece from The Hundreds in that it’s never been for sale. The only way to get a Black Adam T-shirt is to personally be gifted one by Bobby or Ben Hundreds. This is the only NFT in the collection that captures the intact Adam Bomb design in his OG colors (black, white, red, yellow), with clean, untouched lines against a solid black background.
Adam Bomb Squad
Q: What made you decide to buy the Black Adam 1/1 NFT?
No other company out there is selling their most iconic logo or mascot as an NFT.
Imagine owning the only copy of the Mickey Mouse illustration when Disney first started. You could probably resell it for a fortune today. Buying the Black Adam NFT is pretty much like that.
I don’t get the rights to the Black Adam intellectual property, but I own the only copy of the Black Adam NFT.
Plus, The Hundreds is already an established brand and they’ve been around for 20 years and counting.
I believe that compared to the rest of the market right now, 35 Ethereum is rather undervalued for such an icon.
If you scour through the whole NFT market, there are no cultural icons being sold as NFTs. Yes, there are projects that are being sold at 20 to 50 ETH now, but they are newly created art and none of them have the level of provenance and cultural relevance that the Black Adam has already established.
So, I’m actually betting on the tremendous future value of this NFT, and the future of the brand as well.
After analyzing the situation, I believe that it was an undervalued investment and so I bought it.
Q: 35 ETH was ~US$42K (~SGD$60k) at the time of purchase! How did it feel when you hit enter to confirm the transaction?
It felt a little surreal. But this was not my first NFT purchase, so I’m used to the process having been through it previously. I just had to make sure I was doing it right because on the blockchain, if you make a mistake, you’ll lose your money.
But all in all, it was a pretty normal process. Nothing too exciting, ha.
Q: This was not your first NFT, so how did you get into NFTs?
I got NFTs because a friend told me to look into it. At first, I was skeptical like everyone else – why should I be spending my money on a jpeg file or a movie file right? What’s the point?
It was only after I bought my first NFT that I really began to understand the scene. I don’t think it’s easy for people to grasp and understand NFTs on the outside. It is easy to dismiss them as “just a useless jpeg“.
But when you buy and get involved with the project, you’ll start to understand and experience the idea of community, network, and building a collective universe together. That was how I got into it. But of course I’m an investor at heart. I got in at the beginning of the NFT bull run and I immediately recoup my capital and took profits within the same day.
Q: What other prominent jpegs are there in your vault? ????
I typically don’t buy expensive NFTs.
With NFTs, I’m betting on a promise or a startup. I tend to look for projects that are below 1 ETH and are easy to get in. I’m not a fan of buying things like Bored Apes at ~70ETH or Azuki at ~15 ETH because you’re only buying into the community. Yes, they will probably last because of the power of their community, but I just prefer to bet on undervalued projects that continue to deliver utility even during the bear market.
So, I don’t have many prominent NFTs. The only other prominent NFT I have is Dolce and Gabbana (D&G)’s platinum box. I think that’s about 40 ETH or so when I bought it. D&G is quite a prominent brand and most people would know of them.
Q: What other projects are you keeping an eye on in 2023?
Primarily I’m just keeping an eye on the projects that I’m invested in – Adam Bomb Squad and D&G.
Off the top of my head, Chains NFT and FLUF World. FLUF World is a great project and they have been really building out their metaverse.
I don’t have the capacity to keep updated on too many projects at the same time. But there are many other small projects out there that show signs of promise.
I think JJ Lin’s ARC is also a good project, I think he understands the concept of community very well, so I like what they’re building, it’s really quite web3 native despite having a celebrity figure.
Q: Do you think NFTs will be here to stay?
NFTs are more relevant than crypto to the world. Most people don’t really care about DeFi and crypto, because those don’t really affect their daily life.
But NFTs are a new way for companies to engage their clients. What I see is that big brands are beginning to onboard the mass market into the NFT space. For example, Starbucks just released their NFTs loyalty program. Nike has NFTs. Even Jack Neo started an NFT collection for Ah Girl goes Army.
Any brand can start an NFT project, allowing their fans to engage with the brand and redefine the relationship between the fans and the brand.
The idea of NFTs being a very speculative instrument may actually be gone in the next cycle or so because NFTs can exist simply as digital collectibles. They’re just like your mugs, t-shirts and other collectibles, except in a digital format. And fans already like collecting such items.
Of course, not all NFTs are created equal. Just like not all websites are equal – some are social media, some are e-commerce, some are simply blogs. There are many different forms of a website. And likewise for NFTs, there will be many different forms of NFTs.
And, some NFTs could become investments and hold future value the way antiques, Rolex, etc do.
So, I think NFTs are here to stay and that we’ll see mass adoption in the next cycle where the masses would probably not even know that they’re interacting with NFTs.
Q: Let’s zoom out a little. 2022 was horrible for investors, where do you think crypto is going in 2023?
Crypto is likely going to have a prolonged winter because the crypto market is tied to the macro environment. So as long as the market looks weak, there will be spillover effects to crypto.
I don’t expect things to change much in crypto in the near future, unless there’s a tremendous leap in innovation that causes the eyes to turn to crypto again. Else, Bitcoin and Ethereum would likely move in line with traditional finance markets.
At the same time, there’s been a huge deleveraging in the market with the recent double subprime-like events (Luna and FTX). So right now the people holding Ethereum, Bitcoin are typically hodlers.
With all the leveraged bets liquidated, the current price is much closer to fair value. So, not financial advice, but it might be a good time to start looking into crypto.
Q: You run CryptoKnight alongside Chris and AK. How has the bear market been for your community?
Bear markets are tough, but it’s not new. We’ve been through two bear markets since we’ve started CryptoKnight and we continue to provide support for our students and community.
It is very typical in the bear market for everyone to shift their focus on other things. But we continue to provide updates through the bear market.
We believe that this is a time where the best opportunities present themselves at low prices. Chris made life-changing gains in the previous bear market because he was paying attention when nobody else was.
Chris will also be sharing his take on the current state of crypto and why we remain optimistic about the future of crypto at your upcoming event. I’m sure he’ll share useful insights there.
Q: It’s not easy to stay involved in a bear market, even stock investors are not looking at their portfolios. How are you guys helping the community to stay in the game?
We provide guidance, support and encouragement.
We believe in the potential of cryptocurrencies in the long term and remain in the market ourselves. Hence, we encourage our students to pay more attention and stay diligent despite the bear market so that they too can make life-changing gains the next cycle if and when it comes.
That said, it’s not easy. We help by reminding them of their thesis and why they even started in the first place.
But at the same time, of course, we give them precautions on proper risk management. No one should over-allocate into crypto (or any single asset).
