The last two years have been a wild ride for people that invest in Web3, especially NFT art collectors. From the NFT explosion of 2021 that saw a $69 million sale of a single NFT by Beeple to the constant negative outlooks of “crypto winter” this 2022. One can see what is going on as a shedding of skin of the sector. A way to understand this is that “crypto winter” will remove all the vices and fake promises from the Web3 sector. Because in truth, there has been an oversupply of projects, too much greed, and a lot of hype.
According to Gary Vaynerchuk, an influencer and proponent of NFTs, what’s going on in 2022 is a product of too many people jumping onto the bandwagon of NFTs and crypto looking for short-term gains, while not being good enough operators. This situation led him to predict a year ago that 97% to 98% of all NFT projects in 2021 would drop their valuation to zero in 2022. Although you can’t say that close to all the NFT projects today are dead, Vaynerchuk has been on the money with this particular sentiment. Indeed, while NFT art sales boomed last year, they have busted this year.
What does this mean for NFT art collectors?
It’s not a good time for a quick flip in the NFT art world. However, there is a tremendous opportunity as one might get the sense that the prices for cryptocurrencies might never be as low as they are today (although they could dip even further). If a crisis is a mix of danger and opportunity, then this is what is going on with art in the blockchain. And so, NFT art collectors should keep this in mind: buying artwork through the NFT art marketplaces might carry some risks and require discipline to hold over a long period. One might need to weather some storms for the benefit of getting into the 2022 market to become apparent.
In a time when most NFT projects and collections that were not primarily about art, have lost credibility and value, it might be advisable that if you are thinking of getting into NFTs, you do so to hold NFT art for the long term. Imagine you buy artwork at your favorite NFT art marketplace for 0.5 ETH, and later that artwork gains in value. That’s a big win. But if ETH gains value as well, then that becomes an even larger profit. And such are the opportunities that NFT art collectors can find in the current market.
Where are these opportunities?
NFT art collectors should look in the specialized places where NFT art is specifically sold. Where artists flock to. There are some specialized NFT art marketplaces like Nifty Gateway, SuperRare, or Foundation. An even more specialized and curated place to go is Art Blocks, where you can buy generative art. And even a generalist NFT art marketplace like OpenSea has niches where people can find unique and appealing art.
In short, a big part of detecting opportunities is looking for them on NFT art marketplaces and just identifying the art you like.
Another part of this is getting some research done. Like following a famous NFT influencer that might be collecting art. Where is this person looking? What are some of the artists that this person has bought? Perhaps you could borrow some criteria from this person to find out about opportunities that would otherwise not be too obvious to the general public. The NFT space is one where the community is highly valued. They can be highly educational and a source of information on trends that might soon take over.
Finally, you can also find opportunities in an NFT art gallery. This has been the place where people in the art world have met and found out about new artists. Many traditional galleries have leaped Web3, a behavior that points to how art is one of the truly established use cases for NFTs. One such NFT art gallery is SOPRG in Prague, Czechia. They are a good way for people to have access to artists from Czechia that perhaps otherwise would be unbeknownst to them for the sole reason of geography.
Those looking for opportunities in the 2022 “crypto winter” should probably dive into the NFT art gallery world and see if they like some of the things that could be on display. Especially because this is a sector that is ripe for metaverse experiences. SOPRG, for example, has a parcel in the Somnium Spaces metaverse that is worthy of checking out.
In short, the current state of affairs for NFT art collectors might be of transitional loss of value, but where opportunities might arise if one knows how to look for and identify them. Art for the sake of art is still a proven use case for NFTs, there is a case for saying that NFT art sales might pick up again in the near future. One should not expect that to go away any time soon.
- Disclaimer: This is not financial advice and you should always do your own research.