Although cryptocurrencies have been popular for the last 6 years, it’s safe to say that the trendiest thing to come out of it is NFTs, which everyone in the finance space knows about. It’s made its way into meme culture in both negative and positive ways, but recently it feels like the negative parts are showing more, which means that memes and financial markets are clearly correlated, right?
In the last few months, the once red-hot NFT market had its bubble popped, reflecting the larger scale move of backing away from riskier assets. According to NonFungible, data shows that NFT sales have fallen by 92 percent since September, with only 14,000 last week, and active NFT wallets have fallen by 88 percent since November. Over this time, Ethereum has fallen by approximately 40 percent. Not only that, but overall interest in the space has decreased by more than 80 percent in the past few months as hype has simply cooled down and the heavy negative sentiment. With less interest comes less demand, and with users minting increasingly more NFTs, basic economics will tell you that value is decreasing. Some prime examples have popped up recently, the most recent one being the NFT of Twitter founder Jack Dorsey’s first tweet. Bought for $2.9 million last year, the owner held an auction where the highest bid was $14,000, which is more than a 99 percent decrease in the perceived value. Crypto enthusiasts believe that this has cleansed the market of valueless NFTs, and that there needs to be a utility aspect to NFTs for them to permanently latch onto the whole crypto scene.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.