NFT Investors: How Accurate It Is to Hold Your Tokens in a Bear Market

The value of NFTs has depreciated in recent months, in parallel with the bear market. In the image an NFT from the Bored Ape Yacht Club collection.

Photo: Mario Tama/Getty Images

Within a scenario in which the stock market entered a bear market, the cryptocurrency markets have been hit hard, registering falls in the last 18 months. Given this, the question for holders of NFTs or non-fungible tokens revolves around how convenient it is to keep your digital assets.

A bear market refers to an index, such as the S&P 500, the Down Jones Industrial Average, or a stock that has fallen 20% or more from a recent high over an extended period of time. In other words, investors have sold more shares than they have bought, reducing the capitalization of companies that make up the market.

From the hand of this panorama, the cryptocurrency market has been falling overall in the last 18 months. Bitcoin, the main cryptocurrency, has gone from being worth $69,000 dollars at the end of last year, to $21,000 dollars today, that is to say 70% below the value of its historical maximum.

Unlike cryptocurrencies, NFTs are not closely tied to stock market financial cycles, says NFT Evening. However, they are also experiencing their own recession. last february token sales fell 40%, down from January of $4.4 billion dollars.

Some of the major NFT projects, such as Bored Ape Yacht Club and CryptoPunks lost 63% of their value in one period in May. Experts attribute this scenario to NFT scams and cyber attacks that have increased in the last year.

In a bear market, the cryptoticker website says that “Many NFTs have proven to exceed expectations.” However, due to the volatility of tokens, it is suggested to refrain from spending more than you are willing to lose, in case you consider NFTs as an investment.

There are users who tend to collect NFTs for their artistic value and could accumulate various tokens without worrying about their value in the long term. It is possible to find, at this time, NFTs at lower prices than would be expected. As the market changes, the decision to sell or not can be made based on the profit or loss that is expected to be obtained. It is a risk that may or may not pay off.

Despite the rise of NFTs in the past, some investors are not entirely convinced of their effectiveness. Billionaire and Microsoft founder Bill Gates shared his thoughts on the matter, saying that they are “100% based on the older fool theory,” a financial concept that says overvalued assets can make more money as long as you find one more idiot. big enough to sell them.”

It may interest you:

-Fraud with NFTs: former manager of OpenSea is arrested for fraud and money laundering
-NFT Market Sets New Sales Record at $3.5 Billion
-Instagram is also preparing to integrate NFT into its platform