The price of non-fungible tokens (NFTs) declined sharply this week after shockwaves have swept through the crypto markets as the largest “stablecoins”, Terra and Tether, broke their peg to the USD.
Billions were wiped off the cryptocurrency market, some are wondering about a 'Lehman' moment for crypto. No wonder, all of this has put pressure on other cryptos as well, such as Bitcoin and Ethereum, and has put NFTs on the spot as well.
Tamas Muller, our crypto expert shared his thoughts on the recent downward trends of NFTs:
“After the recent hype of NFTs, we see the market is cooling off. The market is very new and immature so volatility is very likely, and there's also a significant imbalance in supply and demand. On top of that, the overall financial market is going down, with crypto crashes like Luna’s.
In this situation, it’s no surprise that investors are moving away from riskier and more 'exotic' instruments like NFTs. But we can also see that the NFT space is not totally dead; new collections are coming, and big NFT brands are working hard on new developments.
Recently Yuga Labs (the company behind Bored Ape Yacht Club) successfully launched Ape Coin and came out with their metaverse called Otherside. Their effort also shows that in the current phase it’s essential to expand the utility of NFTs, adding more value to them than just the fact of their existence.
I’m sure that with such developments we’ll see another rise in NFT popularity in the future, but with having more utility, it might not happen in the art/fashion field like it did last time.”
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