Navigating NFTs in a Bear Market: From a Collector's Viewpoint
In the existing bearish market conditions, how do collectors manage the risk relating to holding NFTs? In an oversaturated market of NFT projects, what differentiates the sustainable ones?
In the ever-evolving world of NFTs, where most projects are driven by hype, finding a project that stands out for its commitment to technology and its community can be a rare gem. The confusion with regard to choosing NFTs can get quite intense when the market is as bearish as the present. To gain insights into what makes a project unique and how it weathers the challenges of a bearish market, we took the privilege to ask one of our early collectors. Based on that, this writing aims to provide a brief overview of how to navigate through the NFT market when things are not as bright as they used to be.
The interviewee began by sharing what primarily brings him to commit to a certain project. He expressed his disappointments with strictly art-driven NFTs on various ecosystems, where creators either disappeared post-mint or failed to deliver on their promises. This is something common with the NFT projects lacking a rigid source of utility or value. It was when he shifted his focus to the Solana ecosystem and discovered certain projects that had more to offer than mere aesthetics that his interest was truly piqued. These projects stood out by emphasizing technological innovation. Their commitment to technology is the foundation on which they built their reputation. While art may capture attention initially, the long-term value of NFTs often rests on the strength of the underlying technology and the team's dedication to continuous improvement. Such commitment to a tech-driven value structure and a dedicated team working to withhold that commitment is what draws collectors' attention.
Trust in Bearish Market
Navigating a bearish market can be a daunting task. With dropping values and a tiresome downward flow in the market stats, very few projects are able to maintain their mint value. In such unpredictable times, our interviewee found solace in the kinds where creators had visibly gone out of their way to prove their dedication towards their project. He adds that such NFTs have not only maintained the mint value but have also demonstrated unwavering dedication to the community. By choosing to leave all mint funds in the NFT pool, certain teams have declared a rare commitment that speaks volumes about their principles and the desire to prioritize the supporters over self-interest.
The existence of such projects shifts the general perspective on the NFT market during bearish phases significantly. They certainly raise the bar and set an example of prioritizing customers. Unfortunately, most Web3 teams look out for their own interests with little to no consideration their supporters' are driven by greed rather than market conditions. During a bear market, these projects are the ones to resort to cashing out mint funds or making decisions that prioritize their immediate financial gain. However, the projects that avert from this path and follow one that focuses on building and nurturing its community even when the market is challenging, garner the trust and loyalty of the collectors.
Investing Wisely in a Bear Market
The go-to strategy for holding NFTs in a bear market is to do thorough research and not be afraid to ask tough questions to the teams. When we asked our interviewee for the details, he advocated for a discerning approach, cautioning against falling for projects that promise the moon without a solid foundation.
In a bear market, it's all too easy to succumb to fear and uncertainty. Many investors panic-sell or chase quick profits in an attempt to mitigate losses. However, the collector, for our interview, strongly suggests not to undermine the power of due diligence and long-term thinking. He speaks mostly in light of his personal experience. Although he has no impeccable strategies for investing and holds a couple of NFTs that have significantly dropped off in value, he emphasizes going for projects that have long-term growth potential and are committed to the holders' interests.
Furthermore, he also stressed the significance of investing in projects led by trustworthy teams who prioritize their community. By carefully evaluating projects and seeking those with trustworthy teams and transparent intentions, one can definitely weather the storm of a bear market.
The Future of Tech-driven NFTs
When asked about the future potential of tech-driven NFTs, our interviewee used the term "slow burners" to describe the relevant projects. Adding on, he sees the NFTs as something not too volatile, given their value doesn't skyrocket with hype or market conditions but is closely tied to the team's commitment to delivering on their tech promises. As long as these projects continue to prioritize tech development, their collectors can anticipate continued growth for these projects. Their unwavering dedication and focus on complex builds over easy profits provide a solid foundation for their long-term success.
Given the fluctuations of the NFT market, his optimism about more stable NFTs only makes sense. With a constantly evolving ecosystem, the projects that focus on innovation and utility are likely to stand the test of time. The vision of tech-driven NFTs for providing fast iterations, API, RPC, and easy access to data positions them as the cornerstones of Web3 development. The evaluation for them is mostly based on tech-driven competent developments rather than the volatility of the market. Hence, as long as they harbor a passion for building efficient technologies and stay consistent with developmental activities, we expect the values to only increase in the coming days.
The crypto ecosystem is a complex web of technologies and platforms, each relying on the other for efficiency and growth. The NFT projects committed to providing essential infrastructure services are destined to position themselves as a pivotal player in this interconnected landscape. Their focus on providing fast iterations, API, RPC, and easy access to data is poised to become a cornerstone of Web3 development. As the project evolves and expands its offerings, its influence and importance within the broader crypto ecosystem are likely to grow exponentially.
Fetching Authenticity and sustainable projects
The main reason to prefer certain NFT projects is their long-term commitment and their considerable effort in keeping up with the holders' expectations. Diving deeper into the "whys" and comparing these projects with others, there are certain characteristics that indicate a team's dedication to the project. As mentioned earlier, most NFT projects in the market are too fixated on their short-term financial gains and their own interest while neglecting the ones who hold their tokens. But when it comes to the authentic ones, they get out of their way to be diligent in the cause of their project. Some leave all mint funds in the pool while actually building the project, rendering confidence in their holders and leveraging to have faith in their project as something that is in for long-term gains.
Finding authentic projects can be truly difficult in a space that is characterized by fraud. For someone new to NFTs and Crypto, the utmost attention has to be paid to research and asking difficult questions. Another significant lesson to learn by heart before learning the hard way is– if something seems too good to be true, it is, most of the time, too good to be true. You can never get too skeptical about anything in this sphere. In the words of our interviewee, most of these projects exist to lure you out of your funds while not delivering what they had initially promised. It is a hard charm to find a project with actual value and long-term potential.
The safest way to differentiate and pick sustainable projects is to mark those that have shown consistent effort in materializing their promises. Looking at the mint funds and their activities in an unstable market can also provide necessary cues while judging NFT projects.
Navigating the NFT market during a bearish phase requires a thoughtful and patient approach. While our interviewee's opinions were solely based on his personal experiences, the lessons drawn from their insights can be applied broadly to the NFT space. The key takeaways include prioritizing technology and team commitment, conducting thorough research, and considering a project's principles and intentions when making NFT investments. Ultimately, the NFT market, like any other, is subject to market cycles, but sound strategies and a focus on long-term value can help collectors and investors navigate even the most challenging conditions.