If you’ve been into the NFT space for some time now, then it’s likely that you would have been around in the last bull run. The last bull run was a euphoric period of time, which now only feels like a distant and fading memory. During that period of time, you could virtually buy anything and the chances were that it would appreciate in value over time. However, times now are very different. We are in the midst of one of the worst bear markets ever, and many investors’ portfolios are in the red.
There’s a saying that goes, “the bull run makes you bags, but bear markets make you rich.” This may seem strange at first, as it’s likely that you’ve heard the majority of people moan about losing money in the current market climate. To make money successfully in a bear market, you must change and adapt your strategy to the current environment. This is something I like to term as being an “NFT chameleon”.
In a bull run, flipping NFTs aggressively is a good way to stack cash. However, in a bear market, it can be a good idea to ‘pull the trigger’ on heavily discounted ‘blue chip’ NFTs that you are usually priced out of. In a bear market (or recession), almost every asset class that appreciates in value over time, becomes very heavily discounted, including NFTs. By buying discounted NFTs, the goal is to take profits in the next bull run, to generate astronomical returns if/when the project surpasses its previous all time high.
If you’re unsure of what I mean, let me give you an example. In the last bull run, the BAYC peaked at an all time high of 180 ETH. Now, because of the bear market, the floor price has fallen to an absolute bargain of 73.7 ETH. That’s more than half price! If you have high conviction in a project and its team, placing a bet on it surviving the bear market and ‘skyrocketing’ once again can be a very good investment strategy and a way to make money in the bear market.
I must caveat this by saying many projects do not survive the bear market and end up dying completely. If you are going to buy anything, please be sure to exercise caution and do your own due diligence. Be sure to have high conviction before making any decisions. Be safe out there!