My Strategy for the Crypto Bear Market: Part 1 NFTs
Many of us have the misconception that bull market is the time to be involved in the market and when bear market hits one should stop investing and run away to safety and not look back till the next bull cycle comes knocking.
In my view this is really counter productive as if you start entering the market after the bull run has commenced you would need to get lucky to make any significant gains. On the other hand if you do the heavy lifting during the bearish phase not only will you will be rewarded much you will also be able to make informed choices and not rely on luck to perform well during the next bull cycle.
I strongly believe that bear cycle gives you time to observe, research and pick projects and assets which are best enabled to perform well once the bull phase kicks in.
This holds true for all asset classes in crypto like crypto currencies, DeFI, NFTs, P2E Gaming, or any other new category that may come up.
A really important factor irrespective of the market conditions is to ensure that your portfolio is well diversified both in terms of which asset classes you include plus selecting multiple projects within an asset close to avoid putting all your eggs in one basket. Next would be to decide the % asset allocation depending on your personal risk tolerance levels.
I am devising this strategy across all asset classes but in this post I will be focussing mainly on NFTs.
Before we go any further as always I would emphasise that all contents of this post should not be considered as financial advise and DYOR before making any moves.
Let’s talk NFTs
I have been in the crypto space since 2018 and have seen many ups and downs so now the bull cycles don’t make me so euphoric and the bearish times don’t make me too gloomy either.
By the time I started toying around with crypto BTC and ETH were already well established and I felt a bit late to the party but that’s not the case with NFTs as I saw the phenomenon start.
NFTs are one of the newest asset classes within the crypto environment and also probably the most volatile and inherently risky. It got so much attention and so much money so quickly that it was soon flooded with bad players causing rugs on daily basis.
Though I still feel that NFTs are here for the long term and will continue to grow deeper during the coming times, the only catch will be to select the good projects and weed out the ones that are bound to doom sooner or later.
NFT market has expanded so much that it will not make sense unless we give due consideration to the different categories within it.
PFP NFTs
This was probably the first category of NFTs that rose in popularity starting with Crypto Punks and then BAYC. The wild hysteria that these projects generated led to spawning of innumerable copy cat projects of whom more than 90% are already dead.
This is a category of NFTs that I am going to be really cautious about during the current phase and not touch anything new. Here I think new PFP projects will really struggle to survive if they are not able to offer any added benefits to holder than besides being a cute PFP.
Though I do feel the original group of PFP collections that were launched around BAYC and are still holding strong will survive the bear market.
The only scenario where I will consider investing in these projects is that if the bear cycle gets really bloody and some these holy grails of PFP collections start capitulating and I see a life changing bargain eg. someone trying to liquidate his BAYC for 1 to 2 ETH I will take up that offer. (Ofcouse after ensuring that it’s original and not a fake copy).
NFT Staking Rewards
This is a class of NFTs which can provide you a regular stream of income for holding the NFTs so you don’t need to sell them to realise gains.
The catch however is to find a solid project which will endure through the bear cycle.
If you are able to catch the next Cyber Kongz you will be assured a regular stream of income.
I am currently more biased towards NFT projects that offer staking rewards than the ones which are just PFP. My strategy here is to regularly check their discord groups about how are they building towards their roadmap and also does their reward structure look sustainable.
I am going to focus on the projects that I have been following for over a year and am confident that they mean business and are not just a quick cash grab.
I will wait for dips during the current bear cycle to accumulate further in these projects as my long term conviction on them is really strong.
I will not go into details about these projects as I will do a separate post soon.
Some of the projects I have been writing regularly since last year are:
Mobox- I was lucky to join this project since the day they launched and their reward system is so consistent that I have already made more than my investment through the staking rewards and I still have my NFTs which I don’t plan to sell any time soon.
If you missed my previous post on Mobox you can find it here. It covers details about what you need to invest and what could be your staking rewards. Keep in mind that reward payout rate might have changed over time. https://www.publish0x.com/crypto-projects-sams-reviews/mobox-this-nft-game-is-all-set-to-explode-xykryey
Voxel Ville- This is another favourite project of mine which I have been following since their launch. It is quite different from typical PFP NFT projects as each NFT depicts a different kind of land with a property built on it eg. Lake-side, ocean-front, jungle, suburbs etc.
They recently launched their staking system rewarding users in their native token. I feel once their marketplace is up this project is going to explode. Check my last post here- https://www.publish0x.com/crypto-projects-sams-reviews/most-promising-nfts-in-2022-1-voxel-ville-xwwxqwp
P2E Gaming NFTs
Now I will come to my favourite category of NFTs which is the Gaming projects built around NFTs. The reason I love this category is that if you fins an entertaining game that rewards you for playing it’s basically making money for doing something you would anyways do just for fun.
The trick here is that it the most saturated market as well because last year there were thousands of gaming projects launched and more than 95% of them do not exist anymore. Some were rug pulls, some could not sustain their token value, in some cases the devs got frustrated and gave up in between.
The good news however is that if you know projects that have survived the market volatiles and still going strong there is a strong chance it is going to do well long term.
Here also I have many projects I am convinced to hold long term but I will focus on the ones that have already established them as strong players which are prepared to survive a long bear cycle.
Project Nebula- This project is built on the ICON ecosystem and they have been steadily building over the years a really elaborate NFT game around the planetary systems. One of the most engaging gameplays I have seen where you explore the space roaming in your spaceship and can colonise the planets you encounter.
I have written many posts covering it in details- https://www.publish0x.com/crypto-projects-sams-reviews/project-nebula-why-i-am-really-bullish-on-this-nft-based-gam-xdnwpnm
If you would like to try out this game you can use my referral link to get a free spaceship for a trial period: https://play.projectnebula.com/login?signup=181df0c8-f0c8-4478
Splinterlands- I am not going to say anything about it as you can find innumerable posts about it and I also write regularly about it. I will just mention that it is my strongest conviction in the area and I plan to consistently invest in this project no matter how long the bear cycle runs. I have a gut feeling this project will help me achieve early retirement in the coming years.
My last post on Splinterlands- https://www.publish0x.com/crypto-projects-sams-reviews/splinterlands-beginners-guide-to-gameplay-xpzpvvm
If for some inexplicable reason you have still not tried Splinterlands and will like to give it a shot then feel free to use my referral link: https://splinterlands.com?ref=sambtc
If there is any other NFT project you are really excited about then do let me know in the comments.
Cheers,
SamBTC
