2021 was an incredible year for NFTs, with many project launches and billions of dollars pouring into this new asset class. However, with the overall downtrend of the cryptocurrency market, NFTs have followed suit. This is evident from the overall drop in trading volume and liquidity of many projects across the board.

Ethereum, the most crucial chain in NFTs, has experienced a significant dip. Its native coin sank to a low of $990 from an all-time high of $4,864 late last year. It is now fighting to stay above the $1,000 mark. Solana often touted as a faster, cheaper Ethereum alternative, hasn’t been spared either. The coin is currently trading at around $35. This is down from an all-time high of $258 in November 2021.

Overall, this is perhaps the first real bear market felt in the NFT space. Floor prices have tanked, and buyers, owners, and sellers are frustrated. As a result, many have panicked and decided to liquidate their NFTs at throwaway prices.

Truthfully, the situation may not get better anytime soon. In fact, many NFT projects will most likely die during this bear market. However, there will always be projects that rise to the top, and this ‘crypto winter’ doesn’t mean it’s impossible to survive. There are several things you can do as an NFT creator and/or investor to keep your project and investments going.

 

Surviving as a Creator

The first thing you want to do is keep a cool head. Don’t let the fear of a crash overwhelm you. This will help you avoid making rash moves, which you should never be making in the first place. You will instead be able to maintain a focus on your long-term goals and make decisions that benefit your projects in the long run. You’ll also want to take a few pages from the book of NFTs like Crypto Punks and Bored Ape Yacht Club. These NFTs are fairing relatively strongly in the bear market. They’re still valuable, and the floor prices haven’t dropped, at least not significantly. Why?

You might say that these NFTs are very popular. But that’s only part of the equation. They also do better because their NFTs have extremely strong communities with shared goals. These features encourage people to hold on to the NFTs rather than sell them.

So, you want to;

 

Double Down on Utility

The original NFT hype was mostly about collectibles. As a result, many projects were launched to give people unique digital assets. But while such NFTs enjoyed considerable initial success, they’re hit hardest by the bear market.

This is because these types of NFTs are really nothing more than collectible JPEGs on a blockchain. Their central premise was owning something unique whose value was expected to increase with time. They were essentially collectibles based on speculative value. And when the market started turning sour, speculation became much harder.

Thus, they stopped attracting buyers, and their prices dropped. At the same time, owners panicked and tried to sell for cheap. This drove their prices further down. As a result, such NFT projects are on the brink of collapse.

So, if you want your NFTs to survive the bear market, they must have some utility. They should be more than unique digital assets, and if collectibility is the main source of utility, then an extremely robust community is the minimum you should see. For that to happen, the owner should enjoy privileges or rewards they would otherwise miss without the NFT.

There are two ways you can go about it; confer real-world benefits or focus on the interoperability and cross-pollination of these NFTs and their communities. The best approach is a combination of both, where holders get unique experiences in the real world and the ‘metaverse’. This will give your NFTs intrinsic value. Therefore, owners will have a reason to hold. Such value may even attract fresh investments and potential buyers to your project.

 

Establish an Active Community

Establishing a community gives your NFTs a better chance of surviving the bear market. However, this community has to offer more to its members than just a sense of belonging. It should consist of like-minded individuals who support, teach, and help each other grow. So, even if your NFTs drop in value, owners still have an incentive to hold because of the benefits of having a strong and supportive community. If valuation generation is the main proposition of your NFT collection, you’re probably NGMI (not gonna make it).

 

Surviving as a Collector and Buyer

Like creators, NFT purchasers shouldn’t let fear drive them out of the market. This is especially true if you’re holding what could be considered ‘blue chip’ NFTs. A ‘blue chip’ NFT is essentially a token that has been tried and tested, showing resilience in its price and utility. In this case, you don’t want to focus on the short-term price of such assets. Instead, look at their long-term value proposition.

The bear market is also a good buying opportunity. As the saying goes, “the time to buy is when there’s blood in the streets.” Most NFT projects have seen a price reduction. So if you’ve been monitoring a project that you genuinely believe in, this may be your best opportunity to buy and get involved. However, given how volatile NFTs can be, you may want to avoid high-risk projects.

 

Conclusion

After almost a year of exponential growth, the NFT space is experiencing its first true bear market. This is a tough time for buyers and creators of NFT projects. However, it’s still possible to survive and thrive, especially with a long-term mindset.

As a creator, you want to double down on creating utility and building a community. And as a buyer, look at the long-term value of your portfolio and avoid overly speculative NFTs. You should only buy into projects you believe in or those with a history of delivering.

 

About NFTrade

NFTrade is a decentralized multi-chain and blockchain-agnostic NFT platform. NFTrade is an indexer of all NFTs across all of their integrated chains, hosting the complete NFT lifecycle and allowing anyone to seamlessly create, buy, sell, swap, farm, and leverage NFTs across different blockchains. Using NFTrade, anyone can gain access to the entirety of their NFT, unlocking the total value of the NFT market.

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