Navigating NFT Launchpads in a Bear Market

I know we’re all excited about the price of cryptocurrencies increasing, but we’re not 100% out of the bear market yet, and the performance of NFT collections proves it. Rather than following crypto prices up, the NFT market is basically continuing sideways. There are a few collections with increasing or decreasing floor prices, but we need to be prepared for these sideways movements to hold for a time. Why?

· Low Liquidity – There are not a lot of people looking to buy NFTs right now. They are holding their coins and waiting to see what happens. They may be willing to buy more NFTs when they see the market start to turn around, but they may also just be waiting for crypto prices to hit their limit sell orders to get out. Bear markets tend to force out a lot of investors who were in it for quick money, even if it means taking a loss.

As you can see from this chart (from dgdg.app), volume has been extremely low over the past month, and about 60% of it has been isolated to just 6 collections.

· Increasing Launches – The sheer number of NFT launches is skyrocketing. This is at least in part due to how easy and affordable it is to make a quick NFT collection with AI, even if someone is not really an artist. While I’m a fan of AI as a tool for artists, I’m not excited about how many people are using it for cash grabs.

So the question becomes, how can you keep yourself safe while shopping for NFTs in these market conditions? I want to share a few of the things I look for when buying NFTs from a launchpad. Please, remember to always DYOR, and don’t take anything I say as investment advice.

Is Not Art features hand-made physical artwork that can be redeemed along with video of the art creation. There is also merch on their website. (Launch is 3 Feb - screenshot was taken on 31 Jan)

What I Look for in an NFT Collection Launch

Please keep in mind that some of these principles also apply to utility NFTs, but for that, I would recommend reading my DYOR article on factors to look for in a crypto project. Here are the three main things I look for when buying art NFTs on the IC.

· Past Performance – Does the artist have previous collections? Did they sell out? How are they performing on the secondary market? While past performance doesn’t automatically equate to future success, artists tend to build a following of collectors. So I like to check floor prices, total volume, number of holders, and things like that (NFTGeek is a good source).

· Art Quality – If I don't like the art, I don’t buy it. I either have to be happy looking at it in my wallet or able to sell it. In a bull market, flipping something you don’t 100% love is easy, but that’s unlikely in a bear market. So there’s no reason to mint simply for the sake of flipping.

If all you see is the ICScan logo, then there are no websites or social accounts connected to the NFT collection.

· Socials – I won’t mint an NFT if there are zero socials linked to the project. No socials is a huge red flag to me. True, someone can delete their socials and rug after minting, but at least there is a small amount of community accountability. The scammer will have to start over and build a following again if they want to sell another collection. I also check the number of followers the artist has. For example, one artist has less than 50 followers on Twitter but released three AI collections in the past two weeks. Another AI artist with a small following (less than 250) is launching their fifth collection in three weeks.

· KYC – I’ll admit, I simply forgot to do this on my collection (Colorful Abstracts), and I’ll get around to it in the future. So I know this could simply be an oversight. Also, some artists like to remain anonymous. However, I personally like to know who I’m collecting from. What can I say? I’m doxed, and I like my artists doxed. You can go online and see the face of Jon Ball or Oli Savage or Ludo or Egido Val or even me.

Do I break these rules sometimes? Of course, I do. I own several NotDogFinity artworks, even though the artist remains anonymous. But I’m happy looking at them in my wallet even if the value never increases.

So what I’m trying to say is that now is not a time for flipping, and you have to realize some “artists” are just trying to fill their bags with your crypto before the next bull run. Stay safe, buy art that you like, support your favorite artists, and never use money that you can’t afford to lose.

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