Crypto Fundraising: What Nonprofits Need to Know About Bear Markets

The rise of cryptocurrency fundraising has excited (and even surprised) many in the nonprofit community. But even with hundreds of millions of dollars raised from crypto donors in 2021 alone, some nonprofit fundraisers wonder if the bear market will undo some of the recent exponential growth of Crypto Philanthropy. 

It’s normal for market dips to create anxiety. But in the big picture, crypto adoption is still growing at exponential rates (with 300 million users worldwide), and the crypto markets are experiencing corrections that are normal when comparing them with historical data. 

Whether you organization is considering the benefits of crypto fundraising or is actively accepting crypto donations, it’s a great time to learn about bear market conditions and how they impact your crypto fundraising strategies:

Volatility is a Normal Part of the Crypto Market Cycle

The highs and lows of crypto market cycles may seem extreme when compared to traditional markets. But this extreme volatility is nothing that experienced crypto investors worry about in the long term. As the saying goes, “it’s a feature, not a bug.” 

Bitcoin, in particular, was the best-performing asset of the past decade—measured from 2012 to 2021—outpacing the Nasdaq 100 by as much as 10x. 

Crypto Market Corrections Benefit Many Investors

For many investors, part of crypto’s allure is the potential for crypto assets to appreciate exponentially in value. But that doesn’t mean it’s always a good time to buy crypto. 

The market corrections that typically follow “bull run” market conditions are seen as a boon to experienced investors. During these bear markets, many crypto holders reinvest in their favorite assets at reduced prices, with the hope that they will return to or surpass their previous all-time highs.

Price Dips Mean Crypto Donors Will Have More to Give Later

In 2021, crypto donors gave at least $400 million to charitable organizations. This massive donation volume came from investors willing to donate a portion of their crypto portfolios to nonprofits. But where did the donation volume come from?

Some of these crypto donors may have been very early adopters of Bitcoin and other cryptocurrencies. But much of it was also likely accumulated during crypto bear markets, like in 2015 or 2017, when assets were at a lower price than during bull markets. 

Nonprofits thinking only about crypto donation volume during bear markets are missing a key component of donor demographic, which is engagement.

Donor Stewardship Should Be a Priority

Creating a community of supporters doesn’t happen overnight, especially when you’re trying to connect with an entirely new donor base. Crypto donors have several unique characteristics: they’re young, relatively affluent and tend to be more generous than their cash-giving peers. 

But they also have a passion for social and political issues, and take part in animated debates on platforms Twitter, Discord and Reddit. Introducing your organization’s mission and ethos to crypto users is the first necessary step in the process of eventually asking for donations. 

Since bear markets are a bit quieter, it’s the perfect time to get to know some of your future supporters and to build authentic relationships.

Crypto Fundraising Campaigns Shouldn’t Stop Altogether

During the excitement of a bull market, crypto users may be particularly forthcoming with high-level donations. But even in bear markets, don’t overlook or discredit the generosity of the crypto community. As we’ve seen with support for causes like providing aid to Ukraine, the crypto community is quick to rally around a cause with urgency or global interest, bear market or not. 

Finding a message that can resonate with potential supporters is never easy—that’s the essential challenge of fundraising—but the crypto bear market is a good opportunity to fine-tune your campaign appeal so that it connects with your target audience of crypto users. Try to experiment with small donation “asks,” or reach out to specific communities (e.g., NFT creators) that donate cryptocurrency. 

Your nonprofit might find that what works during a bear market is successful at an even greater scale during the next crypto bull run.

Tap into the Crypto Community’s Generosity  

If your nonprofit is ready to accept cryptocurrency donations or just wants to learn more, check out The Giving Block’s all-in-one crypto fundraising solution. The Giving Block enables more than 2,000 nonprofit organizations to actively fundraise over 80 leading cryptocurrencies and has processed over $100M in crypto donations over the past year.