The NFT bubble may be about to burst

NFT sales unexpectedly surged in August with many big speculators, but analysts fear the market is on the verge of collapse.

The NFT craze began to explode earlier this year, leaving many people confused when many people rushed to invest in an item that did not physically exist. In August, sales recorded on OpenSea, the world's largest NFT trading platform, reached $1.9 billion, ten times higher than $148 million in March. 1, NFT sales only reached 8 million USD.

According to analysts, the high price of cryptocurrencies may be the cause of this galloping increase. NFTs are typically priced in ether, which is up about 23% in August. However, some experts warn the popularity of NFT is turning it into a new bubble.

NFT sales in August were higher than in the first months of the year. Photo: Reuters.​

Michael Every, Rabobank's head of financial markets research for Asia and the Pacific, said the high returns from NFT seem appealing to young people who are struggling to buy a home or buy a home. enrich. However, for him, this is like buying a lottery ticket.

Chung commented with Every, financial experts believe that the NFT is a bubble that will burst. In June, in an interview with Bloomberg, Fred Ehrsam - co-founder of Coinbase exchange, also warned about the risk of NFT collapse. He pointed out many similarities between the crypto craze and the dotcom bubble that occurred in the 1990s. "People will try many things. There will be millions of virtual currencies and virtual assets like NFT coming into existence, just like there are millions of websites out there. Most of them are going nowhere," Ehrsam said.

Ehrsam believes the wave of NFT art purchases is currently overvalued. "I would say 90% of the NFTs today will be worthless in three to five years," he said. You could say the same thing about the Internet companies of the 1990s.

Technology experts realize that NFT is becoming a commodity for investment and profit rather than the value of technology it brings. Ian Kane, representative of DappRadar - an NFT market tracking platform, said: "A few weeks ago, many NFT collections attracted attention and sold out as soon as they were launched. After that, buyers continued to buy again. continue to sell these NFTs on OpenSea to make a profit".

As an example, a cartoon ape-shaped NFT was resold on OpenSea for 39 ETH, or $124,205. Previously, this person bought it for 22.5 ETH, equivalent to 61,329 USD, which doubles after 2 weeks. Another NFT representing abstract digital artwork was purchased for 0.58 ETH, or $1,366, and then resold for a much higher price - 1,000 ETH, or $3,322,710. DappRadar said that in the past 30 days alone, 32 NFTs were bought and sold, earning more than 1 million USD in profit.

However, there are still many people who are still optimistic about the future of this intangible asset. MichaelK, an NFT buyer, said he spent about $250,000 on NFT. "Covid-19 is causing people to spend more time at home and online contributing to the growth of NFT. I don't think NFT is a bubble. I like to think of this as something new and will thrive in the future. ", I said.

NFT - stands for Non-Fungible Token - the term refers to a digital asset using blockchain technology. The advantage of NFT is diversity. Everything in the fields such as music, painting, bonsai ... can be tied to NFT tokens for identification. The ability to use NFT lies in proprietary ownership. In addition, NFT is indestructible and verifiable due to its blockchain-based construction.


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