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By: www.ProfitableInvestingTips.com
The world of cryptocurrencies is coming up on
its 15th birthday. It is also almost the one
year anniversary of the start of a crypto
winter. Bitcoin fell by two-thirds and has now
hovered at that level for three months. The
rest of the crypto tokens have followed suit
except for a few of the so-called stablecoins
that have gone bust.
A newer-than-crypto aspect of the internet and
crypto world is the non-fungible token or
NFT. This is typically artwork but it can be
anything digital and unique. NFTs are bought
and sold using digital currencies (crypto), so
are crypto winter and NFTs on the same track
or not?
NFT Prices Fall During Crypto Winter
About the time that Bitcoin had sunk to its
current trading range in June 2022 NFTs on
average were selling for 25% less as reported
in Hyperallergic. Hypepotamus reviews the
issue and gives it a hopeful spin with
interviews of those working in this niche. One
of their comments is that folks generally do
not appreciate the amount of work and time
needed to develop net tech products or new
aspects of current tech.
As such the NFT world seems to always be looking
for the next new thing and is generally
disappointed that that new thing is not
immediately available. That could be a bit of why
prices are down. The good thing for NFTs is that
their 25% drop is substantially less that Bitcoin
and the other crypto tokens have experienced in
the last year. It appears to us that in both crypto
tokens and unique digital NFTs investors are
reassessing current value as related to where
value will be found in years to come.
Future of NFTs
The world of cryptocurrencies and the world of
NFTs are sorting themselves out. It has
become clear that algorithmic stablecoins are
not as stable or safe as those which are
backed by cold hard cash in dollars, euros,
yen, pounds, or the like. Likewise, investors
in NFTs have learned what investors in fine
art have known for centuries, which is that
not all promising young artists become
Rembrandts, Picassos, or Monets.
Thus, there is talent in picking artwork and
NFTs that have future value and there is risk.
Meanwhile, the world of NFTs is maturing and
those in this niche are talking about
applications in e-commerce, fintech, legal
and even healthcare niches. Such applications
hold the promise of greater value added to
this sector.
Fundamental Versus Speculative Value in NFTs
and the Crypto Realm
We have often voiced our opinion that the
world of crypto tokens will eventually
gravitate toward values based on
fundamental uses such as how Ethereum is a
lynchpin in the NFT world and others have
more value in the Metaverse or DeFi
(decentralized finance). In this regard we
discussed how Ethereum may well end up
with a higher total value than Bitcoin.
In the crypto world one can view Bitcoin as a
commodity or an investable asset like a stock.
The latter especially makes sense as Bitcoin is
tracking with the Nasdaq up and down as
markets are buffeted by inflation, rising
interest rates, war in Ukraine, and increasing
tensions between the US and China. The
current NFT world is more like the world of
fine art where quality matters as does fame of
the artist.
But artwork is often seen as a hedge against
inflation and, as such, tends to go up in price
when inflation rages. It remains to be seen if
NFTs will follow that route to value or will
settle into a prolonged winter with crypto
tokens.
For more insights and useful information about
investments and investing, visit
www.ProfitableInvestingTips.com.

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Crypto Winter and NFTs

  • 2. The world of cryptocurrencies is coming up on its 15th birthday. It is also almost the one year anniversary of the start of a crypto winter. Bitcoin fell by two-thirds and has now hovered at that level for three months. The rest of the crypto tokens have followed suit except for a few of the so-called stablecoins that have gone bust.
  • 3. A newer-than-crypto aspect of the internet and crypto world is the non-fungible token or NFT. This is typically artwork but it can be anything digital and unique. NFTs are bought and sold using digital currencies (crypto), so are crypto winter and NFTs on the same track or not?
  • 4. NFT Prices Fall During Crypto Winter
  • 5. About the time that Bitcoin had sunk to its current trading range in June 2022 NFTs on average were selling for 25% less as reported in Hyperallergic. Hypepotamus reviews the issue and gives it a hopeful spin with interviews of those working in this niche. One of their comments is that folks generally do not appreciate the amount of work and time needed to develop net tech products or new aspects of current tech.
  • 6. As such the NFT world seems to always be looking for the next new thing and is generally disappointed that that new thing is not immediately available. That could be a bit of why prices are down. The good thing for NFTs is that their 25% drop is substantially less that Bitcoin and the other crypto tokens have experienced in the last year. It appears to us that in both crypto tokens and unique digital NFTs investors are reassessing current value as related to where value will be found in years to come.
  • 7.
  • 9. The world of cryptocurrencies and the world of NFTs are sorting themselves out. It has become clear that algorithmic stablecoins are not as stable or safe as those which are backed by cold hard cash in dollars, euros, yen, pounds, or the like. Likewise, investors in NFTs have learned what investors in fine art have known for centuries, which is that not all promising young artists become Rembrandts, Picassos, or Monets.
  • 10. Thus, there is talent in picking artwork and NFTs that have future value and there is risk. Meanwhile, the world of NFTs is maturing and those in this niche are talking about applications in e-commerce, fintech, legal and even healthcare niches. Such applications hold the promise of greater value added to this sector.
  • 11. Fundamental Versus Speculative Value in NFTs and the Crypto Realm
  • 12. We have often voiced our opinion that the world of crypto tokens will eventually gravitate toward values based on fundamental uses such as how Ethereum is a lynchpin in the NFT world and others have more value in the Metaverse or DeFi (decentralized finance). In this regard we discussed how Ethereum may well end up with a higher total value than Bitcoin.
  • 13. In the crypto world one can view Bitcoin as a commodity or an investable asset like a stock. The latter especially makes sense as Bitcoin is tracking with the Nasdaq up and down as markets are buffeted by inflation, rising interest rates, war in Ukraine, and increasing tensions between the US and China. The current NFT world is more like the world of fine art where quality matters as does fame of the artist.
  • 14. But artwork is often seen as a hedge against inflation and, as such, tends to go up in price when inflation rages. It remains to be seen if NFTs will follow that route to value or will settle into a prolonged winter with crypto tokens.
  • 15. For more insights and useful information about investments and investing, visit www.ProfitableInvestingTips.com.