Fun-Money vs. Blue-Chip NFT Tiering
Two very different rules for buying art you love vs. buying an investment.
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 5
- Confidence
- 85%
Kevin Rose's rule for deciding how much of his own capital to put into an NFT purchase. He splits buying into two distinct tiers: a 'fun money' tier for pieces priced in the hundreds of dollars that he simply loves and can afford to lose entirely, and a 'blue-chip investment' tier reserved for projects that were genuinely first to establish a category, technique, or technical standard (like CryptoPunks defining ERC-721). This prevents overpaying for hype-driven collectibles while still allowing him to enjoy the culture, and it keeps his larger investment dollars concentrated in projects with durable, historically significant status rather than clones chasing a trend.
Origin
Extracted from Acquired
Core principles
- 01Separate emotional/collectible spending from investment spending
- 02Only invest real money in projects that were genuinely first at something
- 03Cap fun-money spend at an amount you can fully afford to lose
How to run it
- 1
Set a price threshold for fun money
Decide a cap — Kevin uses roughly 'hundreds of dollars' — that you can afford to lose entirely.
- 2
Buy for love of art and community
Within the fun-money tier, purchase pieces because you love the art or its community, not because you expect price appreciation.
Pro tip Treat these purchases as a way to mark a moment in time, like a digital photo album.
- 3
Reserve larger sums for 'firsts'
For real investment dollars, only buy projects that were first to do something meaningful, such as the first fully on-chain generative art or the first project to define a token standard.
- 4
Avoid clones and copycats
Screen out projects that simply replicate an existing format without originality, since they lack long-term durability.
Watch out Copycat avatar projects risk becoming worthless once the novelty fades.
- 5
Reassess durability of the project
Continually ask whether the community and roadmap suggest lasting relevance versus a short hype cycle.
In the wild
Kevin bought a few Cool Cats NFTs at a low price purely because he liked the art and its community, treating it as disposable fun money rather than an investment.
→ He enjoys swapping his avatar and accepts the position could go to zero without regret.
Kevin cites CryptoPunks as defining the ERC-721 standard, making it a genuine 'first' worth real investment dollars rather than a clone.
→ He treats such category-defining projects as long-term holds rather than speculative flips.
Common mistakes
Mixing collectible and investment money
Spending investment-sized sums on pieces bought purely for fun, without applying the 'firsts' filter.
Chasing the next CryptoPunks
Assuming any new avatar project could become as valuable as an original, ignoring that first-mover status is what created lasting value.
Is it for you?
Best for
Collectors and investors building an NFT portfolio who want a clear spending discipline.
Not ideal for
Someone with zero risk tolerance for any speculative loss, even small amounts.
From the transcript
“when I personally buy an NFT, I'll say first and foremost, well, what's the price point? If the price point is hundreds of dollars and…”
“Now, when it comes to spending like real dollars and like actually making an investment, then I'm looking for more blue chip related stuff.”
From the episode
Kevin Rose from Web 2.0 to Web3
Kevin Rose