We’re in the middle of a NFT winter. A lot of things happened, and many tokens are selling at rock bottom prices right now. As you know, NFT prices have been dropping since before Christmas. The problem with NFTs is that these kinds of drops are very rare. In the long run, they will only increase in value as more and more people learn about them and more use cases develop. We might be in the middle of this NFT winter, but it won’t last forever. What do I mean? Well, most token price falls happen when there is a strong bear market present. The crypto markets are experiencing lows right now because investors are worried about regulation and security issues. However, even if NFT prices stay low for longer than usual from now on… that doesn’t mean this will be the end for the technology or the industry at large! Let me explain…
What is a bear market?
A bear market is a period of low market prices followed by a rise in the price of a commodity or security. That rise is called a bull market, and that’s where we are right now. When a bear market happens, it is a sign that a bull market is about to begin. Keep in mind that during a bear market, you should never store all your tokens in one single wallet. Although it might seem like a good idea to keep your crypto assets in a single wallet, this is actually a very bad idea. When a bear market happens, people panic. They want to get their money out of their portfolios fast. So, they’ll do anything to sell tokens: from dumping their holdings to creating fake news. As such, it’s not uncommon to see fake news about a project or a CEO that’s supposedly dumping their token. HODL at all times!
Why does a bear market end?
There are many reasons why a bear market ends. The most common reason is that the market is ready to rise again. When the bear market is over, people will go back to investing in the crypto markets. When they do, the price of a security goes up and reaches a new all-time high. Another possible reason for a bear market to end is when the cryptomarket is mature enough to hold steady prices without the need for any more investors.
How to survive a bear market?
When a bear market happens, the price of your NFT portfolio will drop significantly. That’s normal. However, it’s not normal for the price to drop by 90% or more. That’s when you need to protect your portfolio as much as possible. The best way to do this is by buying tokens on a low price and HODLing them until the price recovers. Why does buying tokens on a low price work? Because, when you buy tokens on a low price, you’re basically buying shares in the crypto markets. And because shares are part of a collective investment portfolio, they experience the same returns as the rest of your portfolio. But HODLing tokens is not just a smart way to protect your portfolio; it’s also beneficial for the long-term health of the market. When you HODL a token, you’re making it more likely that the token will return to the market once the bear market is over.
NFT Use Cases: The Future of Cryptocurrency Investment
Now that you know what a bear market is and why it happens, let’s talk about what you can do to survive a bear market and thrive in the long-term. First and foremost, you need to HODL. HODLed tokens don’t get dumped, and they also don’t get purchased on the low-price. HODLing tokens is the best way to protect your portfolio and make it grow. The next good strategy you can use to survive a bear market is diversifying your investments. This means that you should invest in various tokens instead of keeping all your money in one single wallet. This will help you avoid large losses in one single wallet. When it comes to investing in the crypto markets, it’s good to remember that there is no “one-size-fits-all” strategy. That’s why it’s important to diversify your investments as much as possible.
As you can see, it’s important to know how to survive a bear market. Bear markets happen, but they don’t last forever. When they happen, you should protect your portfolio as much as possible by buying tokens on a low price and HODLing them until the price rises again. Finally, it’s also important to remember that bear markets are wonderful opportunities to diversify your investments.