Good morning friends! Welcome back to Week in Review!
Last week we discussed Apple's subscription addiction. I am going deep into the NFT mania 2021 and whether it has any meaning.
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The big thing
The NFT market continues to defy reason, but that's part of its charm. As I watch JPGs sell for millions of dollar, one thing that has been particularly troubling me lately is whether or not this really matters.
Over the past year, I've spent a lot time pondering the NFT market. At times, I've even lost my sleep over it. Although I don't own the images or trade them, it hasn't stopped me obsessing about the market and searching Discords to find the trends. I have been on numerous Twitter Spaces, and even lurked in subreddits to try to get a better understanding of it all. Although it is a niche interest, I have tried to keep most of it out of this newsletter. However, Bitcoin continues to flirt with an all-time high and NFTmania persists.
Investors have continued to drop billions upon billions of dollar on NFTs over the past month. OpenSea has recorded more than $3 billion in transactions volume over the past 30 days. This is a stark reminder of how much off-peak money continues flowing into NFTs.
All that money went to many different places. CrypToadz, which was funded by $100 million from investors, has been one of the biggest success stories in the last month. They look like this. MekaVerse, a new project, saw $130 million in transactions over the past few weeks. Although they are a little more expensive, you would not spend more than $8,000 to get one. Cryptoslam, where I pulled most the data I refer to here, is tracking 163 platforms that did more than $1,000,000 in volume over the past 30 days. This number doesn't include individual artists who sell their work on platforms such as OpenSea.
There are two types of NFT communities: larger-scale NFT project like Axie Infinity or NBA Top Shot that have tens of thousands of users, and smaller-scale NFT community projects like CryptoPunks or Art Blocks that only have a handful of hundred to thousand owners. While larger-scale projects may be more traditional games with more intricate in-game economies, smaller projects look more like fine art markets that are paired with exclusive social clubs. While some smaller projects may eventually grow to larger scale, others have set a limit on the number of NFTs and have made them exclusive.
Axie Infinity has made more than $500,000,000 in sales over the past 30 days. This includes nearly 2 million transactions, and 350,000 buyers. CryptoPunks made $200 million in the same period, with 484 transactions and 309. Buyers.
When I talk to friends about big-ticket sales from smaller projects, the first thing they say is that it is likely money laundering. Although I can imagine some of this happening, it is a boring explanation that doesn't match my best guess at what's actually going on. That is, a group of thousands of investors have rationalized irrational investment. They chose to do this by buying pixel art and drawings about animals.
Investors might believe that only a few of the oldest NFTs are historical objects of intrinsic value, but there are many new NFT projects that can earn ten-million-dollar valuations with little effort and imagination.
It is likely that momentum from stunned retail investors has resulted in a market full of massive wealth being generated and then re-invested into by Ethereum millionaires, who can massively outspend for deals while simultaneously pushing the implied value, the NFT market, and the price Ethereum up. These investors tend to be people who have held onto Ethereum throughout its waves. They are less likely to sell NFTs that they have bought unless they are trying to purchase a more expensive NFT or have been offered too good to pass up. Many smaller, high-value projects that are low-value stay liquid at the low end. However, the project's massive valuations and occasional big purchases keep prices rising.
This babbling is my attempt to explain that what's going on here is bizarre. There is also a lot of noise, mostly from a few thousand customers.
When investors speak about mainstream adoption and future uses, they tend to focus on larger-scale projects such as Axie or Top Shot that combine many of the technical aspects of cryptoeconomics in a more user-friendly package that can be adopted by the majority of users. Although NFTs can be used to drive more complex virtual economies, I find them fascinating. However, there aren't as many takeaways from the billions of dollars that flow into digital art and smaller-scale projects such as CrypToadz that venture capitalists and crypto investors are trying to convince.
There were only three NFT platforms that had more than 10,000 unique buyers in their communities in the last 30 days. While the success of platforms like Axie Infinity is certainly worth examining, it seems we are in the midst a speculative frenzy. It's not easy to draw any hard conclusions about the implications of all this madness for the future.
These are some stories I believe you should look into this week:
Apple won't likely support alternate App Store payments any time soon
Apple tried to convince the media and the public that Epic Games' legal battle with Apple was a win. But, Apple quietly announced over the weekend that they are appealing the decision and asking for the courts to hold the changes that would allow alternative payments within iOS apps.
Apple displayed a calm demeanour after the ruling. However, it is clear that billions of dollars are at stake for Apple if this order stands. Delaying the rollout will result in billions of dollars not going to other payment providers, or remaining in developer coffers. Epic appealed the decision, hoping to get a favorable ruling. However, it is clear that anyone expecting a quick resolution will be disappointed, as is often the case with corporate law.
Nintendo changes its SaaS goals
Nintendo is a strange big company. They have been resistant to the latest trends in gaming, even when they embrace them. However, their mountains of beloved IP gives them every chance to succeed. They announced details about their new annual membership, Nintendo Switch Online+, which costs $50 per year and will offer gamers more content. This is a significant increase over the $20 annual Nintendo Switch Online subscription. However, consumers are not sure what the actual selling point is beyond increased virtual console support for unannounced N64 games.
They are launching the service with free access for Animal Crossing: New Horizons. This play only works if you're Nintendo, and because the penetration of first-party titles is so high among device-owners (and likely subscribers), it will work. The new Animal Crossing title has been sold by Nintendo in excess of 3.4 million worldwide.
Microsoft pulls LinkedIn out of China
As China's government cracks down on big platforms and regulators tighten their grips, it has been a turbulent time for tech companies in China. Microsoft announced this week that it was pulling LinkedIn out China. This is yet another sign of the cooling relations between China and America.
China's LinkedIns are not the dominant force. The most interesting thing about this is Apple's impact on this regulatory boom. Although officials may not be keen to regulate them, the past year has shown China's regulators that they have many surprises in their arsenal.
Here are some of my favourite reads from the TechCrunch+ subscription service, which we recently renamed:
Although Visa and Plaid may have decided to follow their own paths, the data connectivity startup was not in a complete loss. Plaid claims that its customer base grew by 60% between 2020 and 2020. Company executives claim similar growth this year.
To fundraise more smartly, founders should use predictive modelling
It is happening faster than ever, with more capital flooding into growth equity earlier in its development. Even with the enthusiasm to pour more equity into startups, founders now have unique opportunities to think differently about how they will capitalize their company.
One startup's productivity boost with "Get s*** done every day"
We introduced a Getting Shit Done Day to increase productivity. Employees set clear goals and are given specific tasks. There is little communication involved. Although we encourage employees to not use social media, we don't look over their shoulders. The goal of GSDD (Getting Shit Done Day) is to increase our time in deep work and minimize distractions for one day each week.
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