While a good number of development studios find NFTs to be really cool, many gamers are justifiably concerned about how the gaming world will turn out financially. Thus, the massive NFT price drop a few weeks ago has benefited a lot of people and there is hope that the digital tokens will finally come to an end. Well, say what you will about NFTs and the question of why they exist is certainly not unfounded, but one thing is clear: they are not going to stop existing any time soon. On the contrary, the “risk” of renewed noise is very realistic.
The NFTs Described Downward Trend Is Only a Reaction to the Crypto Crash – Cryptocurrency crash – which in turn resulted from the current global economic uncertainty. The reason for this can be summed up simply: when you need money, you sell the most unsafe things with the biggest price swings. Bitcoin is at the top of this list.
However, one should not fall under the misconception that there are many ordinary individuals who all came up with the same idea and sold their digital goods. Instead, according to investment bank Morgan Stanley via the Financial Times, up to two-thirds of alleged Bitcoin trading volume in 2021 was generated by crypto institutions. These include depository banks, stock exchanges, and crypto funds that trade with each other. This year, the proportion of institutional investors has risen to about 75 percent, so private investors are playing an increasingly smaller role in the big game of price volatility.
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This is important because the price of bitcoin no longer behaves like an independent capital investment, but is subject to real economic fluctuations. In concrete terms, this means that Bitcoin is getting closer and closer to the NASDAQ stock index, which not only indexes the 100 largest joint stock companies, but has also fallen sharply at the same time as the cryptocurrency. And where one cryptocurrency fluctuates, so do the other — in this case, Ethereum. This has to do with NFTs because they are on the block chains of currencies and are traded in the corresponding currency. If the value of Ethereum decreases, the NFT also becomes cheaper, that is, it loses value.
Because cryptocurrencies, such as NFT, have no real equivalent value and are therefore highly speculative, their price also depends on the overall crypto picture. This is in the so-called Expressed by signs of fear and greedWhere fear of financial loss is balanced with greed for easy money. Values are calculated from market events, analyzes and media surveys, with Bitcoin currently at 12 out of 100, i.e. with “extreme fear” and Etherum at 24 also receiving a “fear” rating.
And those who are afraid are selling, in this case, their NFTs. The downward spiral that followed gives many critics of NFT reason to hope that the trend is self-extinguishing.
But prices have not only caught up, they are rising again. Although NFTs have no real value in reality, the principle of rarity still applies. There is only a limited number of each NFT set to buy and those who haven’t received anything in the speculative game can now buy the tokens, which are still not cheap, in a special offer.
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