Above: from @ivonatau on Instagram

Does it pay to stay bullish on cryptoart in a bear market?

The value of art transcends money, and the statistics seem to agree.
2 years ago

This article is part of a series

We’ve seen it all in the bear market: free mint metas, goblins taking reign, and an exodus of traders, collectors and flippers surrendering their NFT quests, perhaps to return for the next cycle… or perhaps not. What this has meant for the NFT market as a whole is a cataclysmic downturn of sales volume, and participants and observers of the market are in agreement that this is one of the worst crypto crashes to date. Whilst buyers turn out their pockets, asking ‘wen moon?’, one must also consider what the bear market means for artists. How do creators continue to build their careers in web3 whilst sales volumes plummet? What strategies can they employ to weather crypto’s winter? And come spring, will these efforts mean that cryptoart will finally prove a safer investment than PFPs?

How is the market faring as a whole?

In general, art as an asset class has proven to be a wise investment during recessions and economic downturns. During the 2009 crash, auction prices fell by 27.2%; but the art market made a healthy rebound just two years later. In comparison, the S&P 500 fell by 57% and it wasn’t until 2013 that the market began to restabilize. 1 Today, the general perception is that art makes for a robust alternative asset investment. To open the inquiry into how investments in digital art fare in a crypto bear market, however, is a slipperier affair, due in no small part to the inherently volatile nature of cryptocurrencies. Before concluding that crypto art makes for similar wise investments, it is therefore worth zooming out and comparing NFT art sales with the NFT market as a whole.

Punk9059, also known as NFTStatistics.eth, has been keeping track of market trends and sharing his daily findings on Twitter throughout 2022. On July 30th, he reported a steep decline in sales volumes and USD value on popular NFT trading platform OpenSea compared to the previous year, stating: “Last year on July 30, OpenSea volumes jumped from $10mn to $30mn and never looked back. Unfortunately, today will be the first time ever where NFT USD volumes are down year-on-year.”

This finding is in line with the analyses of NonFungible, the world’s largest NFT data resource, which revealed in their most recent quarterly report that the global NFT market is down 20% in sales volume. The total volume in terms of US dollars traded has experienced an even steeper decline, due to the lower values of cryptocurrencies such as Ethereum, and exhibits a 25% decrease from Quarter 1 of this year.2 Despite statistics being in the red, Nonfungible notes that the overall 25% decrease in the NFT market is relatively modest compared to overarching cryptocurrency trends. For example, the average price of an NFT has decreased by only 6%, whereas the value of cryptocurrencies has been divided by almost three during this period.3
What is most interesting to note from Nonfungible’s investigation is that the NFT art segment has been one of the least affected by the bear market when compared to categories like gaming.4 Compared to its close cousin–the collectible and PFP category–NFT art represents a much smaller segment of the market (with $430 million in USD volume traded in Q2, compared to almost $3.8 billion for collectibles), and yet it has experienced a much less sharp downturn. The quantitative data thus looks surprisingly reassuring for NFT art, but exploring how artists approach the bear market on a qualitative basis reveals the secret to how and why art fares better during trying economic conditions.

How do artists navigate bear markets?

By investing in artworks that collectors love, enjoy, and have a personal connection with, return on investment becomes a bonus, not the goal.
Given that the number of active wallets in the crypto space today has decreased by 33%, we can assume that amongst this figure is a slew of emerging artists who struggled to envision a career within the crypto space, and thus took flight from the bear.5 For those more fortunate and who have already built a reputation in the digital arena, sales have faltered, but new strategies are highlighting ways to beat the market.

Let’s take, for example, the 19-year-old artist FEWOCiOUS, who recently saw the sale of one of his older pieces, “The Sailor,” go for 350 ETH ($595,000) on the secondary market. “The Sailor” was minted in January 2021, and sold for 46 ETH ($80k at the time) to collector YeahYeah. Since, FEWOCiOUS has benefitted from numerous lucrative partnerships, such as a $2.16M sale at Christies and a partnership with RTFKT. Today, he remains one of crypto’s youngest and most successful artists, with traditional art market backing to boot. 

So how did “The Sailor,” an older work that in most contexts would be considered buried and forgotten, achieve the artist’s largest sale ever? The (not so) secret is in FEWOCiOUS’ dedicated collectorship. During this period, YeahYeah put “The Sailor” back on auction, and posted about it on Twitter repeatedly. The auction gained impressive traction, with even SuperRare’s CEO, John Crain, tweeting: “Art history is being written in real time.” The passion behind these posts attracted the attention of NFT patron extraordinaire punk6529, who subsequently placed the winning bid of 350 ETH for this sale. Here, it was the actions of two influential and loyal collectors that projected the artist into one of the most impressive sales the NFT market (let alone the bear market) has seen to date. In web3, artists have the unique opportunity to engage directly with their collectors and form genuine, lasting bonds. In the case of FEWOCiOUS, the dedication and care put into these relationships led to a sale that will undoubtedly result in plain sailing for the rest of the bear.

As for AI artist Ivona Tau, the bear market is the perfect time to focus on creating quality work and partnerships. Tau has previously sold works at Sotheby’s and Fauve auction houses, demonstrating an important and productive relationship with the traditional art market. Though incredibly successful in her practice, she has not seen the same gargantuan sales prices as artists such as FEWOCiOUS. Thus, Tau’s approach to the bear market is more down to earth, more tangible, and exposes a strategy that other emerging and established artists could adopt today. 

When asked if she had experienced a difference in the number of sales made during the bear market, Tau expressed, “I noticed that the secondary [market] is a lot slower. On primary there is not much difference, but only because I started minting way less frequently. In a way it’s good as it allows me to focus on the quality of the works, without the pressure to mint often.” During the slower sales period of the bear market, Tau also consecrates a bit more time to marketing her drops and establishing fruitful partnerships with galleries and auction houses. Developing the storytelling aspect behind her works, participating in Twitter Spaces, and organising giveaways for presale lists are some of the actions the artist has taken in the past few months. The result? A sold-out collection of her long-form generative art series in seconds, “as if it were not a bear market at all.” 

Indeed, despite fewer sales and a devaluation of Ethereum and Tezos, Tau remains positive about being an artist during the bear market: “There are many opportunities for artists who persevere, as many will quit the space during the down times. On one hand it helps to increase visibility through less noise in the space, but it also allows for easier connections with galleries, DAOs, and collectors. The important thing to remember is that regardless of markets and trends, the connections you make are there to stay and they will take you to web 4.0 or whatever comes next.” 

Despite the break-neck speed of the NFT space, Tau reminds fellow artists that creating excellent work and a steadfast collectorship takes time: “It is a patience game. This is something that traditional artists are used to, but perhaps forgot with the NFT hype.”


What FEWOCiOUS’ and Tao’s bear market strategies have in common is a commitment to investing in, and engaging with, their communities of collectors. The qualitative perspectives of these artists, coupled with the somewhat surprising findings in reports such as NonFungible’s, appear to be cautiously optimistic about the NFT art market compared to the onslaught of articles and tweets that have preached the death and doom of crypto this past bear cycle. Does this mean that art on the blockchain echoes the hardy trends of the traditional art market during recessions? Can we truly assume that investing in digital art makes for smarter investments? Though these discoveries may lead one to believe that investing in cryptoart is ‘safer,’ to make such grandiose and premature conclusions would be a hit of copium. One must not forget that NFTs are still extremely volatile, no matter what the currency or category. For traders and collectors who are here to stick out the bear and stay in the market for the long-term, however, diversifying their assets and backing talented digital artists would not be unwise. 

There is an aphorism in the art market that dealers and advisors swear by: ‘Invest in art that you love.’ This rings just as true for art NFTs. By investing in artworks that collectors love, enjoy, and have a personal connection with, return on investment becomes a bonus, not the goal. This genre of collectorship contributes to the creation of a robust and sustainable NFT art market, which in turn outlasts the bulls and the bears.


Vienna Kim

Vienna Kim is an art professional with a specialization in new media and technologies. After her Bachelor’s in Art History from the University of St Andrews, and her Master’s in Art Business from the Sotheby’s Institute of Art, London, Vienna has dedicated her career to the intersection of the traditional art market and technology. She has worked as a freelance writer for five years, exploring a range of topics such as how the blockchain can empower African artists, Susan Sontag’s ‘Notes on Camp’ and the Met Gala, and various exhibition reviews and artist spotlights. Now based in Paris, France, Vienna is the Artistic Manager at digital art and NFT company ARTPOINT. She likes talking about games and NFTs.



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