NFT Market Seeks Normalization After First Crash – May 21, 2022

NFT Market Seeks Normalization After First Crash – May 21, 2022

Did the bubble temporarily drop or burst? According to experts, the authenticated digital object NFT market, which has been on the rise since its emergence last year, has just suffered a sudden downturn and must now be restructured if it is to attract the public and last to the end.

NFT, Non-Fungible Token or Non-Fungible Token in Portuguese, is a digital format that allows any virtual object (whether it be an image, photo, animation, video or music) to interact with the blockchain, supporting Bitcoin technology such as cryptocurrencies.

According to Chainalysis, NFTs generated $44.2 billion in 2021, with a 75% drop in spending between February and mid-April.

The drop in the value of NFTs in the first tweet from Twitter co-founder Jack Dorsey was one of the hallmarks of this mini-crash.

The first tweet NFT, purchased for nearly $3 million in March 2021, was auctioned off in April. Its owners hope to sell it for $48 million, but the current top bid is just over $20,000.

In contrast, virtual land sales on the metaverse platform (digital universe) “The Otherside” of the NTF owner’s most famous club “Bored Ape Yacht Club” reached hundreds of millions of dollars in 24 hours. possible.

It is difficult for the general public to understand that this volatile market is in the hands of a few heavyweights who use their influence to push NFTs, the founder of a professional website listing scams around the world. cryptocurrency.

Fashion effects aside, what basis should be used to set a “fair” price that everyone can understand?

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More than just “utility,” Molly White said, the “status” conferred by the NFT’s ownership appears to establish its value.

There are several versions of NFTs, such as “Boring Ape”, which have access to very closed groups and are therefore the most expensive.

Crypto artist “Louis16art” recommends trusting the author’s reputation, the identity of the former NFT owner, the quality of the work and the technology used.

Other experts advocate creating a database for first-time buyers, similar to those used for traditional art, and maintained by digital art experts.

The problem is that most of these assets are being sold on the unregulated marketplace called Opensea. “When new technology comes along, scammers are immediately alert,” explains Racine’s expert lawyer Eric Barbry.

The platform revealed in January that 80 percent of images on its network that were converted to NFTs for free were faked or stolen.

For Molly White, the market will fail to attract the masses without greater “regulation” and “consumer protection.”

“It’s like the Wild West,” concludes Sophie Lanoë, for whom the bubble burst was an opportunity to start over “on solid ground.”

Aside from the ongoing security gaps and legal “loopholes” that can prevent people from buying NFTs, how do you simplify purchases that are still complicated and hard to understand for non-tech hobbyists?

“Nobody knows anything, but everybody wants to know,” said Olivier Lerner, co-author of the book NTF Mine d’or (NTF, Gold).

“The only thing missing is that the platform is more accessible,” he estimates.

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