Cryptocurrency came into the limelight with the endorsements of celebrities and with accolades rolling in from different spheres and quarters of life. These endorsements were largely responsible for the billion-dollar investments that rushed into the digital token markets. The story appears to be a bit different this time, as there is a massive cryptocurrency meltdown going on in the market. This has raised concerns that NFT may soon experience a crash.
NFTs are digital assets related to digital images, “collectable” items, avatars in video games or assets and items in the burgeoning digital world of the metaverse. Celebrities in the past, ranging from Gwyneth Paltrow to Parris Hilton and Serena Williams, have boastfully claimed ownership of a lot of NFTs. This inspired many young investors to latch onto the financial opportunities that abound in the market. All of the most important cryptocurrencies are losing value, which is also not good news for NFTs.
The signs are also not good for NFTs, with a 50% reduction in the traded volume. This report is culled from the analysis firm Non-Fungible. The firm stated that the market was getting used to the large number of NFTs that were made last year, while the resale market was just getting started.
CryptoSlam, a monitoring firm projected a dramatic crash in May. CryptoSlam confirms that this is the least figure of all time. A sign of the projected crash is evident when the Twitter Founder, Jack Dorsey made an attempt to sell the NFT of Twitter. Dorsey could only sell for $3million, but the new owner still finds it hard to resell the NFT at $20,000.
Molly White, a renowned critic of the crypto market highlighted possible reasons for the downturn. White noted that “It could be a general decrease in hype, it can be fear of scams after hearing a lot of high-profile ones, or it can be humans tightening their belts,”
OpenSea, a prominent NFT marketplace also admitted that more than 80% of the NFTs created with its free tools have been fraudulent and a wide range of the NFTs, digital images and popular artworks were reproduced and released without securing permission.