- The presence of bear markets is as essential for the evolution of digital assets as bull markets.
- When the crypto market went down in 2018, many turned away from non-fungible tokens, which is currently one of the most profitable in the crypto world.
- The crypto winter of 2018 brought the creation of OpenSea, the largest NFT marketplace with a trading volume of $30.45 billion.
In recent days, a crypto-digital market has been seen moving with a bad streak for cryptocurrencies, a reason that has made many think if it is a good time to sell everything, or on the other hand to do hodling.
To give a possible solution to this question, it is always useful and above all wise to take a look at the annals of history, economic history in this case, to find similarities in the past and how investors reacted at that time.
A look to the past
In this regard, Kevin Virgil, General Director of Asset Management at Everyrealm, wrote for the medium Decrypt an article in which he recalls one of the most successful investors who managed to amass a great fortune in 1939 when World War II broke out, Sir John Templeton.
This investorI had the view that the best time to buy was when the world was submerged in maximum pessimism and the best time to sell was when a moment of maximum optimism was being experienced.
This thought was reflected when he bought shares of various European firms that were listed on the stock market when the world conflict broke out, later becoming one of the richest investors in the world.
This thought has served to lay the foundations of the Firm Franklin Templeton, a global investment advisory center, and it is so current that it could even be applied to the current economic situation as both the traditional market and crypto have been severely affected in recent weeks.
the crypto market
Kevin Virgil, highlighted that in the crypto market, both Bitcoin and Ethereum continue to be at the top of the best performing assets of the previous decade, despite the fact that they currently have a price of 55 percent, below the historical maximum that they managed to reach in 2021.
As if that were not enough, the movements of the values in the virtual currencies have a high link with the price changes in the NASDAQ. This can mean that investors are selling cryptocurrencies at a high rate, just as they are selling their shares.
Needless to say, this does not bode well, at least in the short term, especially for all crypto investors, at a time when the largest tech stocks are trading up to 85 percent per cent. below their all-time highs.
That being said, there can be a sense of fear and hopelessness in the air and the crypto environment, however, it is good, as mentioned above, to remember the story and the sayings of Sir John.
The market corrects itself
Present circumstances are particularly familiar to past ones in another age, and certainly lThe presence of bear markets is as essential for the evolution of digital assets as bull markets, that is, it is a type of Yin yang, since they need each other.
It is important to consider that the market always corrects itself and projects that are not worth it simply disappear. If we think of the bull market as a party, then the bear market is the maid the next morning sweeping up the trash. However, the bear market has another relevant characteristic; This is where the biggest and most successful projects come from.
Bear market and the NFT boom
The NFT market had its big boom last year following the sale of the work “Everydays: The First 5,000 Days”. This work was created by the artist Beeple and was sold at Christie’s auction house for $69 million dollars.
However, although 2021 is known as the stellar year of NFTs, this type of asset traces its origin around 2017 where CryptoKitties was the star product of the moment, however When the crypto market went down in 2018, many pushed aside non-fungible tokens.
Nevertheless a small group of entrepreneurs in 2018, created a proof of concept for an NFT marketplace, raising capital for their business at a valuation of $8 million.
They built their project quietly for three years. Thus, when the sale of Beeple contorted the world and the markets, the small platform called OpenSea, suddenly it became quite a milestone.
By early 2022, the firm managed to garner a valuation of over $13 billion. Therefore, this is the kind of opportunity that crypto investors should be looking at, an innovative and above all scalable infrastructure, which has the capacity to drive the next iteration of the evolution of the digital asset ecosystem.
In that sense, the metaverse is very likely to be one of the main drivers of such developments and one of the topics of greatest interest in the next bull market.
Making an analogy, those who invested in the infrastructure of non-fungible tokens, obtained good returns, so it is likely that those who invested in the base of the metaverse, will achieve a similar result.
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