Profile Picture (pfp) NFTs Shopping, Do’s and Don’ts

September 13, 2021

After getting some feedback and checking analytics, it’s become crystal clear to me that most of you are interested in NFTs. That doesn’t come as a surprise. I bet you all saw the crypto punks go for millions, and even the Bored Apes NFT series just closed an auction at Sotheby’s of $24 Million for 100 Ape NFTs.

Last summer the Profile Picture (pfp) NFTs blew up. While Bitcoin and other cryptos were taking a nap, the NFTs took over and did $ Billions in sales volume on platforms like Opensea. I covered a bit on this in my previous blog, which you can find here.

While the first NFT boom of early this year was focused on Art, the latest trends are the pfp NFTs. You have probably seen the Crypto Punks & Bored Apes profile pictures in your Twitter feed. My feed is about 80% full of different profile pictures of funny animals nowadays.

So how do you get one? What do you need to watch out for? And can you still get a Punk?

For the last question, you currently need a minimum of 92 ETH to buy just one. So yes you can get it if you want, but maybe there are other value bets out there.

Let me walk you through my thoughts and experiences with pfp NFTs.

Why Is This NFT Valuable?

Arguably, it’s not valuable at all! Who cares about a silly picture, right?

Well, currently the sales prove the exact opposite.

Some Punks or Apes go for over $1 Million per piece. Or sometimes it’s sold in a bundle, like on the big auction house Christie’s, who sold 9 Punks for $16 Million in May this year.

I bet you’re thinking: “Why do investors and speculators find them valuable?

There are a few reasons:

  • Scarcity – Limited Supply
  • Metaverse – They have utility in the Metaverse
  • Digital flexing – Showing off how rich you are
  • Hype – Follow the money
  • Community – Be part of a group
  • Commercial rights

Scarcity

Take the Bored Apes as an example. Only 10,000 of them exist and they are differentiated by traits they have. Some might have a cigarette, while others have a funny hat. A combination of different traits can make your Ape very rare.

Only 10,000 unique pieces, so if demand increases supply, the value goes up.

Metaverse

There’s currently a big belief that we’ll all be living in the Metaverse in the future. So people are preparing for that with investments in their digital identity by buying an avatar NFT.

There’s also Decentraland, where investors are buying up digital land and property to own a piece in the Metaverse.

I do believe in the future most of us will have a digital pseudonymous identity in a metaverse. Where we’ll have a house and meet up with friends, do funny activities. All digitally.

However, I’m not sure if that will happen over the next 10 years, which the current public opinion in the NFT world is.

Digital Flexing

We all like to flex once in a while. Some of us do it on Instagram, some in personal conversations on WhatsApp, and some do on Twitter. While others buy a Rolex or Tesla.

Putting your expensive pfp NFT up as your profile picture gives you status. Everybody can look up the value of your NFT, so basically you’re showing how much money you put down for your silly avatar. What do you think of my flex?

This also transitions to the real world, as some NFT enthusiasts are printing their avatars on merch like hoodies, shoes, and other gadgets.

Pfp NFTs Hype

Are you hyped up yet? Most of Crypto Twitter is.

With $ Billions of volume on Opensea over the past months, and even $1 Billion in volume in the first week of September. It’s undeniable that pfp NFTs are hyped up at the moment.

More people coming in, the demand grows and prices go up.

Subsequently, there’s currently a huge boom in new pfp NFT projects starting. Most of them are related to a silly animal, trying to copy the style of the Punks, Apes, or other popular NFT series. This kind of reminds me of the ICO boom of 2017/2018.

Community

The popular pfp NFT series become communities. They chat in Discord and engage with each other on Twitter. Just posting your new avatar with the #NewProfilePic will get you tons of likes and comments.

Basically, you buy yourself into an exclusive club.

The Bored Apes full name is actually Bored Apes Yacht Club (BAYC). They already threw a few parties in the USA, which you could only enter if you prove you have a BAYC NFT in your wallet. I expect this trend to grow when there are fewer COVID restrictions.

Commercial Rights

Once you own the NFT, you get the commercial rights. Basically, this opens up a whole new world of monetizing your asset, which not many people are utilizing just yet.

You can create merch, like hoodies, shoes, or action figures of your NFT character, and sell those. All the profits are yours. You have the right to do it and you should. I like the idea of this guy, even though I don’t think he’ll get rich of it.

But beyond creating merch, there’s a whole new playing field to be explored. You can create derivatives, rent out your NFT in metaverses, stake them, use them as collateral for credit, and more.

I can talk for hours about this, so let’s save that for a separate blog. Let’s just say, nobody figured this game out yet.

Monetizing your digital assets, just let that marinate in your thoughts for a while.

How To Get Into The Pfp NFTs Game

There are two ways to go about it.

1. Minting

When a new NFT is created, this process is called minting. New pfp NFTs that are launched have to be minted. This is usually done on the website of the project, where they will have a launch date and a minting button.

The mint prices are usually fairly low, between 0.01 ETH – 0.1 ETH, however, the ETH gas fee can be high. And the popular series end up in “gas wars”, meaning the wallet that pays the most gas, gets through the blockchain first and mints the NFT. Some of these series sell out in a matter of seconds or minutes, like “The Sevens” just a few days ago.

The Bored Apes were minted for 0.08 ETH in May 2021, while the cheapest ones for sale today are around 40 ETH. That’s 50,000% ROI in ETH in just 4 months. On top of that ETH went up too, so if you’re calculating in fiat terms it’s even more insane.

Minting on Solana is cheaper, so you can also have a look at the Solana pfp series. The volume there is currently increasing.

You can check the upcoming series on Rarity.tools or for Solana on Solanalysis.

2. Secondary Market

Once the minting is all over the only way to purchase the NFTs is on the secondary market. There are a few platforms out there, like Mintable, Rarible, Nifty Gateway, Niftify (coming soon). However, Opensea has by far the most volume at the moment.

It’s easy to set up your account. Follow this link and connect your Metamask. Once you sign a message on Metamask you should be able to buy and sell on Opensea. When you buy an NFT you cover the gas fees. When you sell an NFT, the buyer covers the gas fees. Although, a royalty % of the sale still goes to the creator of the NFT and a commission to Opensea.

To get an idea of what’s popular, check out this blog.

Flipping Your Pfp NFTs

In this game, a popular strategy is to flip the NFTs quickly. Buy some low and sell them high, kinda like trading altcoins.

Arguably, the buy-and-hold strategy is best here. As the people who bought Punks or Apes early are either millionaires or almost there.

However, there are some reasonable arguments to flip the lower-tier projects. As most of the value there comes from the hype phase we’re currently in.

Another flipping style is getting into the minting game. You mint an NFT and you flip them for higher to the people who missed out on the minting. Not exactly rocket science, right?

My brother is currently doing that, you can check out his process on Twitter.

Not to create any FOMO, but I’ve seen several Tweets like this:

I managed to flip a few NFTs this week within a few hours, with profit margins of 25-50%, like a Gambling Monkey, a Guardian of the Metaverse, and a BLOOT.

However, sometimes you don’t find your buyer and you can choose to hold your NFT or sell it at a loss.

Just like the first Mutant Ape I bought, I could have flipped it for 100% within a day. However, my plan is to have at least one Mutant Ape (it’s a second series of the BAYC), for the longer term. So I decided to stick with it.

A few days after my first Mutant Ape purchase, I bought a second one (it gets addictive real quick). The second one is rarer, so I’m planning to keep it. Therefore, today I put my first Mutant Ape up for sale, you can find it here for a little over 6 ETH.

Mutant Ape Yacht Club – Popular amongst pfp NFTs

The Do’s – When Buying Pfp NFTs

I’ve been using Crypto Punks, Bored Apes, and Mutant Apes throughout my blogs as examples. Mostly because they are the most famous and popular ones, with moonshot type of sales. Which helps with the clicks and keeps your attention right where I want it.

But it can get a bit boring to keep using the same examples when there are so many series out there. So for the purpose of this part, I’ll use Lazy Lions as an example. It’s time to show them some love, as the community is very loud and loves to ROAARRR on your Twitter, whenever you mention them.


Now, what makes one Lion more special than the other?

It depends on who you ask, but here are a few reasons:

  • Rarity Rank
  • Popular Traits
  • Personal Preference
  • Value Bets

Some people want to find the rarest ones from a series. While others look for specific traits.

On Opensea, in a listing, you can find the “properties” of that specific NFT. As you can see on my Lazy Lion, it has a combination of different traits/properties which defines its rarity rank.

If I would click on one of the properties, I find other Lions with that exact same property and I can compare the price. This helps me find if there are any big price gaps at a specific property, which makes it likely I can flip the NFT quickly at a higher price. This is how you can find value bets.

You can also find certain traits of a Lion that have high sales volume. At the activity tab of a series, you can see the volume of sales, average sales price, and the latest sales. Just a quick glance at some of the latest sales will give me some interpretation of popular traits. Check out the Lazy Lions activity here.

Tools like Rarity Sniper, or Rarity.tools give insights into the exact position of your NFT in the series.

In the image below I used Rarity.tools to find the rarest 500 Lazy Lions that are up for sale, listed from low to high. The cheapest top 500 Lion is 1.49 ETH. I think it looks quite fresh, to be honest. I might snatch it up when I finish this piece.

Last but not least, people’s personal preferences matter. Some people like “cleaner” characters, the ones that have few traits. Some like avatars with many different traits to make them look special. One of the popular responses to NFTs on Twitter is “looks rare”.

That should say enough.

Buying the Floor

One thing I can’t leave out is that buying the floor can be pretty good. The floor basically means, the lowest price of that particular series. The current Lazy Lions floor is at 0.5 ETH.

The NFT floor fluctuates just like any other cryptocurrency. Sometimes the floor rises, sometimes it collapses.

Buying a floor NFT that is collapsing, is similar to buying the dip of crypto. Usually, it’s the common ones of a series that are sold at the floor, but every once in a while you find a rare one up for grabs.

Check floor prices here.

Bid Over Buy

If you’re shopping around, you don’t always have to buy them at the price they are listed. You can bid on the NFT as well, and hope that the owner sells his pfp NFT to you at your price.

This can be done on items that are currently up for sale, but also items that are not listed for sale. The owner will receive an email from Opensea with the current bid amount.

I get daily emails now of people bidding on my NFTs below market value. Which I’m obviously ignoring. Bases on the rarity score and the specific traits this Mutant has, I value it between 30-40 ETH. So a hard nope on this bid.

The 6 Don’ts – Read Carefully

After reading all of the above, you probably getting eager to jump in the game. However, like always in crypto, be careful. There are a few things to avoid when getting into pfp NFTs:

  • Don’t FOMO into random series
  • Do not try to win gas wars
  • Don’t mint series that have no sales yet
  • Keep your private keys safe
  • Tripple check unverified projects
  • Do not accept stable coin bids

Some of these are quite obvious, but here’s a little guide.

1. FOMO

Don’t FOMO into anything, also not NFTs. You’ll see many people making money flipping or holding NFTs. If this is not your cup of tea. Stay out.

If you want to join the party, don’t blindly follow the first influencer that Tweets about a random NFT. Many of them are paid for promotion, and they are not actually buying the NFTs themselves.

Take your time, get used to the industry. Join a few Discord groups of the NFT series. Start window shopping before you actually plan to make a purchase. All so you can get used to the playing field until you get ready for matchday.

2. Gas Wars

Do not try to battle in gas wars. You’ll lose.

If a transaction fails on the blockchain, you still pay gas. Meaning that if two people want to buy the same NFT at the same time, the blockchain processes the transaction that uses the highest gas first. And the second one still gets processed by the blockchain (so you pay gas), however, the NFT is already transferred to a new wallet. So your purchase fails. You end up empty-handed and with less ETH in your wallet because you paid for gas.

The NFT whales run the game, don’t mess with them.

This is particularly the case with the popular mint series, people 10x the normal gas price and leave the new individuals scratching their heads wondering what happened.

3. Unpopular Series

When you mint, you get a random NFT from the series. There’s no difference (at least I haven’t seen any yet) of getting in first or last.

So don’t get in first.

Some series don’t sell out at all, or some take weeks to sell out. While other series sell out in a matter of seconds or minutes. Do you want to pay your ETH and wait a few weeks before you get your NFT? I don’t think so.

On top of that, a series that takes weeks to sell out obviously has no demand from the NFT community. So it will be much harder to sell it for a profit later down the line.

4. Keep Your Private Keys Safe

That goes without saying. Still, I see some NFT veterans sometimes get their wallets emptied with NFTs that are worth Millions of dollars.

They either scan a wrong QR code on a website they don’t know. Or their internet security is breached some other way.

Not your keys, not your coins. So protect yourself in every way. Probably best to store your valuable NFTs on a hardware wallet like Ledger, which is compatible with Metamask as well.

5. Avoid Unverified Projects

Always look for the blue checkmark. Opensea is a marketplace, and scammers copy the names (or use similar names) of series to trick people into buying NFTs that is not officially part of a series. You can buy a fake Bored Ape for 0.1 ETH, while the original is worth over 40 ETH.

In the image below you can see the blue checkmark on the profile picture of 0N1 Force. Blue checkmark = verified.

6. Say No Stable Coins

On Opensea you can bid with ETH, Wrapped ETH but also with Stablecoins. Some bots and people try to bid USDC on your NFT to try to trick you into clicking the accept button. Even though everyone knows 10 USDC is not the same as 10 ETH.

On this image, you can see I got USDC and DAI offers for a valuable NFT. Double-check any offer you are willing to accept.

You might think, who is going to fall for that? But I recently saw a Bored Ape valued over $100,000 go for $0 because of a misclick. Regularly I see these types of mistakes from small wallets but also large NFT collectors.

Pfp NFTs Recommendations

I can hear you thinking, “so which one should I buy?”

Well, the Crypto Punks or Bored Apes would be the easiest picks. But not all of us have a minimum of 40 ETH to splurge, right?

You can check this page, to find rankings based on volume, floor price, owners, and more.

There are few series that I recommend you to look at between 0.5-5 ETH floor price. Some of them I own, others are on my shopping list to find a rare one or good floor entry price.

Check them out and do your own due diligence. If you end up buying one of these NFTs based on this blog, tag me on Twitter @mortpoker when you flex your brand new avatar. I’ll make sure to retweet you.

For you guys that are on the sidelines and don’t want to figure all this stuff out. I’m talking with a few friends to create a pool of ETH, of which we’ll buy the more blue-chip NFT series, like the Crypto Punks. Contact me by email at: morten@cornelius-ventures.com, if you want to talk about this.

Big NFT Collectors to Follow

If you’re new in this space, you need to follow a few NFT veterans to see what they talk about. Often they share their newest buys, but mainly they are sharing their thoughts and strategies. Plus the occasional rants and dramas, which are quite entertaining. A few you should definitely follow are:

Usually, you can spot the NFT collectors easily, they are flexing their pfp NFTs on social media.

My Personal Strategy

I can only spend my time once, and I have many things on my plate. So my strategy is based on different personal variables. It’s important you think about yours as well.

Variables to consider are time, (ETH) bankroll, goals, risk, knowledge. It depends on a combination of these things of what is best for you.

I skip minting completely. It’s time-consuming and gas wars are hard to beat. However, there are some gems my brother finds once in a while which he is able to flip for quick profits.

My goal is to own a few blue-chip NFTs for the long run. I want to own a few Crypto Punks, Bored Apes, 0N1, Beeple, PAK, Trevor Jones, and a few more.

To get to that, I got to find a few rare NFT value bets with solid projects.

And to get to as many value bets as possible I set aside an ETH budget to buy. Plus, I’m flipping some common pfp NFTs of solid projects where I buy a low floor and sell at higher prices. All of this, to flip me to some rare ones. Which eventually will go up in value so I can sell it to get into the blue-chips.

The blue-chips are for the long term, anything else is for the short-medium term and I plan to exit those positions before the end of this year. I’m not convinced this NTF mania will hold up in a bear market. We’ll have to wait and see.

If you’re still not convinced this will be valuable at all in the future then I’m sorry but you’re ngmi.

Peace.

****
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1 Comment

  1. Rutger

    Awesome article, very helpful!

    Reply

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