Recently, the macro changes in the digital asset market have also had an impact on the NFT market. According to NFTGo.io data, at present, the NFT market sentiment is relatively cold.
NFT market sentiment; data source: NFTGo.io
When the trading volume of the NFT market fluctuated and declined, many people sold their NFTs and cleared their positions. However, there are still some stalwart holders in the market. This article will analyze one of the data indicators of the NFT market: Diamond Hand Holder. Before exploring this model further, we need to answer the following questions:
Who is Diamond Hand?
What is the investment strategy of Diamond Hands?
How does Diamond Hand view the current market sentiment changes?
Data samples and methodology
We collected the top 20 Collections by market capitalization as data samples, and the total market capitalization of these Collections accounts for over 70% of the NFT market capitalization. Based on the top Collection's diverse data samples, we try to establish indiscriminate data analysis indicators applicable to the entire NFT market.
Early Adopter Curve
In order to reasonably predict the trend of NFT, it is inseparable from the research and application of emerging evaluation indicators. The NFT market is driven by Meme and story background. Therefore, one of the first tasks of evaluating indicators is to fully and accurately reflect the current popular trend in the NFT circle.
The early investor curve is an important indicator reflecting the dynamic trend of NFT Collection. Like startups and new products, NFT also needs a cellular network of early investors to open up the market. The cellular network largely defines the cultural atmosphere of an NFT community. With such a group of early users, coupled with an excellent development team, the NFT project has taken its first step.
If all goes well, the cellular network will replicate itself and develop into a larger cellular network. This is also the path to success for many blue-chip Collections in the NFT field.
diamond hands
diamond hands
We have observed that, typically, shortly after the NFT is issued, minters in the cellular network tend to quickly buy and sell the NFT they minted in the early stage. Although it is difficult to obtain exaggerated profits, the trading risk rate is very low. This kind of trader is called a paper hand. Diamond hands refer to those groups who are optimistic about and firmly hold the NFT of a certain project for a long time, can withstand risks in fluctuations, and finally obtain higher returns.
However, for a Collection, a small number of long-term holdings (HODL) of Minters are often the most valuable community members. Diamond Hands is such a group of strategic investors with a long-term investment vision. Through the transaction history on the chain, if the transaction history on the chain of an NFT contains any behavior of being bought and sold, we will not regard its holding address as a diamond hand, otherwise, it is a diamond hand. (Since holders tend to have multiple wallets, we include the case where diamond hands transfer their NFTs to other address accounts (i.e. NFT Vault).)
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
From the above picture, we found that some projects such as Moonbirds were founded by famous NFT teams/holders, and the creation time is relatively short. In addition, both Meetbits and Moonbirds have also gone through the stage of free mint given by the original project, and the diamond hand content Also relatively high. Projects such as BAYC and Azuki have not been widely welcomed by the market since their inception, but have gradually entered people's field of vision with development and gained recognition. During this process, many early minters quit the project prematurely, and today, they can no longer enjoy the value-added dividends brought by the project.
Bulls and Bears
In the following sections, we will dig deeper into the investment portfolios of these diamond hands in the following sections:
Investment Trends of Blue Chip Diamond Hands
Diamond hand investment strategy
What Alphas are there?
Demystifying the Portfolio of Diamond Hands
We analyzed the investment portfolio structures of diamond hands in BAYC, Meebits, CloneX, World Of Women and Doodles several blue-chip Collections. After a period of development, these Collections have achieved considerable success in the NFT market. As the first batch of investors, diamond hands have also witnessed the development of these Collections along the way by holding positions in NFT assets.
Diamond hands have a strong sense of faith in the Collection they invest in. Although there are not many people, they are regarded as the most strategic NFT investors, exploring the long-term potential profits in the NFT market. Based on this, diamond hands have become the best way for us to understand NFT Alpha, Help us detect a lot of Alpha information from it.
First, we analyzed the investment portfolio structure of diamond hands under different Collections, and summarized the holdings of blue-chip diamond hands in other top Collections in the above five Collections.
In order to obtain more accurate analysis data, we collected data on the holdings of different Collections by each diamond hand, and calculated the frequency of occurrence of each Collection in the diamond hand community.
According to statistics, BAYC has a total of 338 diamond hands. In the portfolios of these diamond hands, the remaining independent NFT Collections involved total more than 1,777. But in fact, among all these Collections, most Collections only have one or two diamond holders. According to the holdings of different Collections by diamond hands, we can divide them into the following three categories:
Alpha
Beta
Gamma
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
The data shows that 20%-30% of BAYC's diamond hands hold NFT Collections such as Bonsai and Parallel Alpha, 30%-50% hold Otherdeed, Sandbox, and Art Blocks, and the number of diamond hands holding ENS exceeds 60%, occupying a dominant position.
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
Data source: NFTGo.io
ENS and Art Blocks
We conducted in-depth research on the investment portfolios of 5 blue-chip Collection diamond hands. After analysis, we found that ENS appeared frequently and did not fall out of the two categories of Alpha and Beta. It can be seen that most diamond hands have their own ENS domain names. ENS price has also experienced a surge in the past few weeks. In addition, in the results, Art Blocks appeared more frequently. Among the 5 Collections we analyzed, 3 of them, Art Blocks had a diamond holding rate of more than 20%. Through the concept of "random artwork", Art Blocks can cast NFTs of the same style as your favorite artists. It is one of the most popular generative artwork projects.
airdrop effect
epilogue
epilogue
In this article, we analyzed and studied the distribution of diamond hands in different NFT projects, and found that they showed obvious differences. At the same time, it also reveals how, as experienced investors, these diamond hands adjust their portfolio structures during the bull and bear periods of the NFT market. Finally, we also studied the investment trends in the diamond hand community, and analyzed the overlap of diamond hand investment in other NFT projects in different Collections.
For a period of time, NFT has been in a period of consolidation. Some users in the market hope to get rich overnight, and some users are not optimistic about the NFT market, thinking that in the long run, the bubble will burst. On the contrary, diamond hands will HODL during the bear market and become long-term strategic holders who see the grand future of the NFT market.
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