Jakarta, Indonesia, May 13, 2022 /PRNewswire/ — NFT has become a hot topic of discussion, especially after many NFTs sold for fantastic prices, such as Beeple’s artwork titled ‘Everydays: The First 5000 Days’ which sold for $69,346,250equivalent to Rp 9 trillion. Inspired by Beeple, the NFT directed by an Indonesian, Ghozali, also managed to gain popularity and sold tens of millions of rupees. Currently, more and more art performers and connoisseurs of Indonesia are beginning to become aware and understand NFT, this is indicated by the emergence of many NFT communities in Indonesia whose members have reached thousands or even tens of thousands when viewed from community social media accounts. Asosiasi Blockchain Indonesia The President, Asih Karnengsih, expressed “the need for literacy related to the implementation and benefits of blockchain technology which can contribute to economic development by Indonesiafor example NFT which can help artists Indonesia gain recognition and rewards or their potential to contribute to the virtual economy.”
However, upon seeing this phenomenon, questions and concerns arise, primarily as to whether this NFT is just a trend or will it become a bubble, a condition in which a high-value asset will rapidly decline. and will disappear from the market.
It is quite possible that NFT will become a “bubble” if the following events continue to occur and are not immediately resolved. What are the things that can make NFT a bubble?
NFT market remains low
The NFT market has actually started to look stable lately. According to Bloomberg, the average trade value of NFTs has fallen significantly lately, from an all-time high $6,900 at the start of the year unless $2,000 of the NonFungible NFT data tracker.
NFT sales data in one month. Source: NFT Tracker.
Major NFT sales also fell significantly over the past month, according to recorded data, NFT sales fell 29% and sales fell 1.17% in USD terms. Meanwhile, top sales, which are sales that took place on the NFT Project website, fell 73% and fell 49% in USD terms.
According to data from the Financial Times, the daily trading volume for NFT on OpenSea fell 80% to $50 million in March, compared to $284 million in February.
Decreasing the volume of OpenSea. Source: Financial Times.
On OpenSea, the NFT tracker DappRadar also shows a decrease in the number of traders and overall volume. Overall trading volume fell nearly 67% in the 30 days of March. for $2.6 billionwith merchants down 23% to 489,796 users.
What’s even more remarkable is that even during the “Big NFT Sale”, millions of dollars and cryptocurrencies still have heavy circulation on OpenSea every day. People still spend thousands and hundreds of thousands of dollars on NFT on average, but research shows that has gone down.
The decline could also be attributed to increased scrutiny from US regulators. According to a Bloomberg article, the Securities and Exchange Commission (SEC) said this week that it is investigating whether NFTs are securities and should be regulated.
Become a Ponzi scheme
In addition to the decline in value, NFT also always has negative sentiments, for example for money laundering. With NFT, money laundering can be easily done as buyers and sellers cannot be fully tracked if using an anonymous identity.
NFT is also called Ponzi scheme, quoted in The Conversation. This is based on several similarities, for example, the first buyer will get a higher profit than the last buyer who lagged the trend of the NFT they bought, and when this happens, the last buyer will only get no profit, because the NFT he bought has no more fans.
Has no core value
Admittedly, there are still many NFTs that do not have a clear core value and utility. It’s just a random image that a user bought because of FOMO. If the NFT continues like this, it is very likely that a bubble will occur, and the work of the NFT which has a clear function will also be drawn into this negative sentiment. Ultimately, this will destroy the NFT market.
The impact of the NFT bubble, if it occurs, will not only have an effect on NFT, but may extend to crypto assets in general, as buying NFT requires other cryptos as a trading tool.
The bigger the bubble, the more it will expand when it bursts.
“This may be the apotheosis, the pinnacle of the all-bubble paradigm. Michael everyHead of Financial Markets Research at Rabobank for Asia Pacific.
To reduce concerns about the NFT bubble, Evan Cohenthe founder of Vincent, also made a suggestion.
“Don’t buy it because it’s NFT, buy it because you love the art, or buy it because you think the collection or community is cool. You want to participate in the assets, not the technology underlying that supports that,” he said. .
So far, NFT is still full of speculation, these three things show that this industry is not stable and is surrounded by negative feelings that can damage the ecosystem and turn NFT into a bubble if NFT industry activists don’t do not attack it immediately.
This article was previously published on Coinvestasi.
PR Newswire Asia is the official press release distribution partner of the Indonesia Blockchain Association.