Big Apple Bummer: NFTs Shunned As Investors Recoil From Risk
This week the NFT conference NFT.NYC kicked off its annual shindig. The get-together has been hosted in New York City since 2021 and brings together creators, influencers, and enthusiasts, indulging in all things NFT. The high-end world of classical music has even jumped into the virtual world as this year’s conference will feature the first-ever launch of Stradivarius Violin NFTs.
It’s less-than-optimal timing for the NFT market, however. The average NFT price has dropped by nearly 70% since April.
Similar to Crypto’s Crash
It seems the NFT market has caught crypto’s cold. Year to date, Bitcoin (BTC) has fallen by more than 50%. NFTs, which are largely transacted on the Ethereum (ETH) blockchain, have seen their sales drop at the same time. Ahead of this week’s conference in New York, NFT sales were down 150%, according to data aggregator CryptoSlam.
Last week’s rate hike that triggered a market sell-off may exacerbate the NFT space’s troubles. As investors shrink from risk, their appetite for what some deem speculative NFT plays may dwindle even further.
Greater Fool or Legit Upside?
Industry titans Bill Gates and Warren Buffet are not fans of NFT investments. Gates recently referred to them as illustrative of the “greater fool theory” wherein profits are only available if someone more foolish than the current owner will buy the product.
Others say, not so fast. They believe the current shake-up may force the market to evolve. One possibility is that NFTs are de-linked from crypto, thereby opening up the market to those who want to use traditional currency. Industry observers also envision NFTs offering more than just aesthetics, but rather provide access to experiences and perks, such as digital sports trading cards or access to unique gaming experiences. As market conditions evolve, the very new NFT will be forced to adapt.
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