Hope for NFTs and surviving the bear market: expert with 15+ years in finance gives his advice

On December 15th, we had an Ask-Me-Anything session on our Twitter space. Our guest — CEO of Kook Capital and a crypto consultant known on Twitter as Kook — has over 15 years of experience in traditional finance. We talked to him about how the crypto market differs from the traditional market, the perspective of NFTs, and what projects he prefers.

The most interesting part of this conversation is in the text below. And you can listen to the entire session here. By the way, don’t forget that you can read us on Twitter 😉

Crypto market vs. traditional finance

I think the crypto market differs from the traditional one a ton. If we’re talking about stocks and bonds as well as legacy financials, crypto is the same vein. However, it is like everything is cranked up. So there are way more scams, way more volatility, and almost no regulation.

There are also almost no safeguards for investors. Like you’ve seen the FTX collapse. You can’t rule anything out.

There are similarities on the fence that people try to treat the market similarly. But you must strip away all the safeguards people take for granted in legacy finance. You are really going into the wild west and risk losing it all. That’s why you should be careful. For example, stay away from trading groups.

I wouldn’t join a paid group because all those paid groups are just like onions. There’s going to be this inner layer, and then there’s going to be an outer layer and another layer, another and other… You’re never going to get to the inner layer, and it’s really a pump and dump for the innermost layer, the core group.

The first paid group is the guys dumping on, and those guys will probably make money. But no matter what layer of the onion you think you’re in, you’re not in the middle. 

As for Bitcoin, it is a capital asset to me. You buy it, you hold it, you sell it, and you have a gain or a loss. I think that securities regulators and lawmakers will always treat it that way. So to say Bitcoin is something different than a commodity — I’m not sure.

How to invest in a bear market and what projects to trust

I think the crypto coin market has established itself far enough at this point that it’s not going away. So I think dollar-cost averaging, when you split your investment into equal parts and just invest these parts regularly, is pretty smart — whatever coin you like.

Of course, I wouldn’t tell the average person to go below Bitcoin and Ethereum, but among altcoins, I think meme coins are pretty awesome. Have you ever heard of CumRocket (CUMMIES)? It’s real. Seriously, it’s real. I saw a tweet about it ~two years ago, bought a bunch of it, and made 50X. 

The crypto industry is actually comedy based. Memecoins attract people’s attention. Dogecoin got so huge because Elon Musk thought it was the most hilarious, ridiculous joke. And he turned it into not a joke.

Now Dogecoin is in the top 30 cryptos, and these coins have no purpose other than they’re a joke. So don’t underestimate meme coins. Or memes, for that matter.

If you’re interested in long-term NFTs, I think you could buy top projects that are already established, but you shouldn’t be minting anything. And you shouldn’t be listening to people on Twitter proposing some NFTs on sale. That’s on sale because it’s probably going to be a zero forever.

Whether NFTs will be on trend again, and when?

What happened with NFTs was the worst thing ever. Because now, the average person, if they’ve heard of NFTs, they know of wealth destruction and a lot of scams.

The irony is NFTs are the future. Web3 technology will change almost every industry on earth. Still, the next time NFTs get a lot of attention; it won’t be because of trading pictures around and fake utility.

When will it be? It’ll take longer for that to happen because, as I said, there’s such a negative connotation in popular culture now around NFTs — businesses with resources [are] just hesitant to step into the space.

But there is hope. Look at how Reddit did their NFTs — digital collectibles backed by blockchain technology are what they called them. They didn’t use the word NFT, but they still created them. That’s smart.

What could NFTs be useful for? I like GameFi, to be honest. I think there are user cases in NFTs where the products will just be better than their Web2 counterparts.

We’re in a recessionary environment now, and long-term interest rates will be going up for a while. And gaming is sort of a recession-proof industry because people like to have fun. 

At the same time, I hate free-to-play models. I am waiting for someone to come out with something cool with a really interesting ownership model and a sustainable game economy. Like the Web3 version of Angry Birds, for example.