Hope in the Bear market
By Laura Wolff
We’re all very much aware of it. Markets are down, and there are a lot of indicators that seem to be reflecting a similar situation to the 2008 crisis. Even though inflation is at an 8% high, and the alarms are going off, just like Monty Pythons sang back in the day, “always look at the bright sight of life”.
Times of crisis bring opportunities of all sorts and let’s not forget that economic fluctuations respond to identifiable cycles. With a certain level of predictability also comes perspective, especially when you see the patterns repeat themselves.
For example, when Bitcoin rocketed to a record high of $19,000 in late 2017, it felt like cryptocurrencies were on the brink of taking over the mainstream. But after the market crashed by more than 80% in a matter of months and skeptics far and wide started heckling the underlying technology, anything related to cryptocurrencies seemed to have lost its appeal.
Come 2022, and the story repeats itself, only with one main difference. Nowadays, it’s not just about crypto; it’s about markets all across the globe.
Now, it’s essential we look at the whole picture with a realistic set of goggles.
According to the Merrill Lynch report, “the current bear market has seen 35 trillion dollars in global value destroyed in 5 months,” and “this crisis has already seen 14% of the global wealth disappear.”
“Some bear markets are followed by bull markets, and some are not. Suppose you’re looking to ride this bear market out. In that case, you need to make sure that you’re prepared for any eventuality.” — says Chamath Palihapitiya, venture capitalist and engineer worth 1.2 billion and now famous thanks to the all-in podcast.
The crypto space has experienced bear markets in the past, and the future is uncertain.
The market is still trying to recover from Terra’s cryptocurrency (Luna) massive crash a few weeks back, and that’s not even the worst part about it. After its $40 Billion collapse, Terra has made its way back with Luna 2.0, which was supposed to keep the stablecoin pegged to $1. It’s already tanking.
But back to the positive side of things, some believe that this bear market will bring growth to the industry. Bertrand Perez, CEO of the Web 3 foundation, seems to believe that the bear market will clear the people that were in the space for the wrong reasons. “With all these projects gone, the legit ones will be able to focus only on developing and building, forgetting about the validation of the token because everyone is down.” He later added, “During the bull market when everything is green, no one thinks about building, everyone thinks about making a fortune, which is the wrong mindset”
But how does all of this affect the NFT space?
That depends on the end of the straw you are at; traders, collectors, artists, and businesses should all look at it from their unique perspectives, but today we want to focus on what collections are doing to adapt to this new season and why collectors are responding to them.
There is no better example to demonstrate how the bear market is a landscape of opportunities than the Free-to-mint collection Goblintown. Many speculate on who is behind it, probably to justify it’s doing so well, but this collection is carrying the NFT market through tough times, and there’s a reason for it.
The NFT market is in a very different place than it was less than two months ago. The tendency looks like it’s free-minting season, with collections focusing on creating a recognizable brand image through creative and appealing storytelling. Most of them are derivatives and have momentum for 1 day and then they dump. The successful ones have a clear identity and an active community, which is essential to survive this market winter.
The Goblin’s storytelling is not only aligned with the current context but also with the feeling of outsiders many of us closely relate with. Storytelling is any brand’s most important tool when looking to create an audience. The capacity to generate an emotional bond with your target should not be overlooked. Facts are great and necessary, but purchases are emotional decisions… its called FOMO for a reason…
Stories are how we remember via experience. But what makes a good story?
It’s not just quality art in itself, but rather how relatable the characters behind the art are and how their struggles resemble those of the audience.
Mystery is also a huge factor, and the fact that Goblintown (amongst others) managed to get to where they are without a roadmap says a lot about the power of suspenseful communication. Another fundamental aspect is to have cohesive sub-plots, like their Burgers and all the other releases they have yet to announce but hint on through their tweets.
But who else is out there understanding the current market trends? Projects such as AI Nightbirds have also recognized that things have changed. No whitelist, 2500 NFTs minted for free, and the rest of the collection with a floor price of 0.05ETH. The success was shown when we had an average floor price of 0.3 ETH and 4.4k of volume traded only two weeks after minting. Their success lies in counting on a team with experience in the NFT market. AI Nightbirds has based its collection on the popular Moonbirds and even managed to get the public endorsement of one of its founders Kevin Rose. This collection proves that success doesn’t necessarily need large communities (they only have 10K followers on Twitter at the moment this was written) but rather committed and involved communities that see the value in what is being done.
Rektguy is another free-to-mint collection currently at a 0.85 average floor price and now sits as the second top NFT collection by 24-hour volume on OpenSea.
While not much has been released, we so far know that there is no utility and no roadmap, but guess what this collection does have… yeap, you guessed it, a relatable story. Rektguy is a misspelling of “wrecked” — “rekt,” which stands for the NFT/crypto trader that has seen a devastating blow to his assets with the recent price crash. Rings a bell, right?
However, let’s not take away credit where credit is due. Rektguy NFT collection’s artist, OSF had a more than decent following to start with (100K) thanks to his previous collection Degenz.
Overall, it’s clear how projects that have been successful so far during this bear market are changing the rules of the game. Free-minting, no whitelist, unapologetic, relatable art, and most surprisingly, no utility (yet). This last factor could come as a surprise due to the recent push from businesses to provide value through NFT collections, but it’s clear that during this market impasse, collectors want to be understood rather than sold. Utilities are essential for future NFT projects, but understanding where the users and collectors are at in every moment of the market seems right now even more critical