Good morning Splinterlandians!
Today I wanted to present my thoughts on why the Rental Market goes through certain "cycles".
A. The most obvious cycle is the "Season Cycle". This is caused by the volume of players/bots who want to max their EoS Reward Chest count... towards the end of the Season, there is typically a large bump in Rentals fueled by the Eos RChest drive...
This also occurs mid season, about 7 days in, although it isn't as significant.
This is the easiest to identify and the easiest to profit from đ
B. The next one is the "Card Cycle"... This is quite a bit more difficult to predict and also somewhat hard to understand although I believe I have finally got a grasp on it...
I make some assumptions:
Bots shift strategy to the meta and depending on what cards the Bot Army needs... those become extremely high in demand...
In response to this, the rental prices surge and life is great for a moment...
In response to the Rental Price surge, people like me try to scoop up those cards relatively quickly and cheaply... thus flooding the market with that card/level... thus dropping the price...
Finally, after the meta shifts again and the Bot Army moves on like the proverbial Swarm of Locusts... Those cards Rental Prices PLUMMET... (however, I am betting they come back as the Meta Cycles around)...
Evidence to this can be found with Xenith Archer, Arachne Thug, etc - especially in the Bronze Tier...
Profiting from this can be tricky as the demand for rentals fuels the demand for cards and the prices quickly spike as supply is consumed to fuel the Rentals for the Bot Army...
Which leads me to believe there is a third "cycle" as hinted below...
C. The third factor influencing these "cycles" is what I call the "Hoarder"... I can only suspect this to be the case but knowing what I do from speaking with many of the whales here in the game - both online chat and irl... that leads me to believe the following:
- Certain "whales" must be utilizing the low MCap and Scarcity of cards to accumulate/hold/sell various cards to their benefit...
If they accumulate post "Card Cycle", they can stack up many BCX on the cheap... if they wait until the next time that card is "needed" by the Bot Army... they can then sell it to the Renters at a large markup - sometimes as much as 100% plus!
This creates artificial supply Highs/Lows and thus affects prices of both BCX and Rentals...
I have a moderate amount of certainty this is happening at least on a small scale and very little evidence other than watching the Market Prices and Availability of cards.
D. The final internal "cycle" takes place on a much larger time scale and I am about to experience my second one... The "Set Cycle"...
I entered the game in September 2021 at the end of Untamed "Sellout", right after the Djinn Oshannus Reward Cards came into play...
Packs were not available in store... new cards weren't being minted - with the exception of Reward Cards... Card and Rental Prices were ASTRONOMICAL... Ask me how I know... đŠ
So when I started buying, playing, renting, etc... I spent LOTS of money on cards that I thought were going to be amazing... and then they proceeded to drop in value after Chaos Legion came out...
I spent LOTS of money buying cheap cards to rent for CP - when that was a thing... now they're not worth a lot and don't rent well except for maybe EoS...
However... we are entering the beginning of this "Sellout" cycle now... I hope that we see a similar Price Action mechanic as we did last time... The "sellout" phase starves the economy of new BCX:$$ and as new players enter and current players accumulate... This all drives up prices as New$$ In > BCX In...
I believe we will see an increase in Rental Prices/Market Prices as the BCX becomes scarce... especially if the demand and new player draw remain constant or increase...
E. Finally, I will end on the external "Cycle" - the overall state of the Crypto Market (and Global Market)... When I entered we were in the tail end of the Bull Market and everything was AMAZING... Life was good, money everywhere... Jan 2022... Enter the 15 Million Packs of Chaos Legion with a seemingly endless supply of BCX... and along with it... the BEAR MARKET... womp womp...
These two factors proceeded to CRUSH prices throughout 2022... but again, looking at the current Market and projections... I believe 2023 runs pretty flat, ranging between $20k-30k Bitcoin, I believe 2024 sees growth and a net positive... probably returning to the $65k mark and then 2025 goes HARD IN THE PAINT... Unless of course we have WWIII âšī¸
The point of this is simple:
If you're trying to maximize your Rental Income, please be aware of the following...
Season Cycle - where are we in Season? This affects prices and Rental RoA% calculations...
Card Cycle - what is the Bot Army renting the everloving shit out of? Combine with the maybe Whale cycle - don't buy the spiked BCX prices because you'll be stuck with them for quite a while...
Set Cycle - Where are we in Set? New Set? End of Set? Sellout? This will all be a factor in determining Card/Rental prices due to the simple metric of $$ In vs BCX In...
Crypto Cycle - Where in the world is... Carmen Sandiego? No... Where are we in the Macro Crypto Cycle - Flat? Bull? Bear? Alts and other projects tend to do EXTREMELY well during the Beginning and End of the Bull cycle and then proceed to SUCK A LOT OF D#$% for 2-3 years... many projects die... Splinterlands did not... just remember that.
Anyways, I gotta run, work beckons - I hope this helps you with some good insights!
Cheers đģ,
- CaptainDingus
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