Nonfungible tokens (NFTs) took the world by storm in March and April of this year with an onslaught of daily headlines about record-breaking sales and big-name companies dropping their own one-of-a-kind digital art pieces dominating the mainstream media.
Fast forward a few months and the narrative has shifted to the ‘NFT bubble’ popping and doom and gloomers warning that NFT investors are on the verge of losing all of their money.
The rapidly declining prices and activity on the top NFT marketplaces have prompted many to speculate on the death of the nonfungible token space despite the well-known cyclical nature of the crypto market that can spring back to life at the drop of a hat.
Active users are the lifeblood of NFT marketplaces, but the choppy nature of the cryptocurrency markets over the past two months, including the May 19 sell-off which saw $ 1.2 trillion in value wiped from the crypto market cap has led to a precipitous decline in user activity.
As seen in the chart above, the active wallets on NFT marketplaces peaked near the end of March and has since fallen by more than 40% as declining values combined with high transaction fees on the Ethereum (ETH) network kept traders out of the market.
The decline in active wallets coincided with a decline in sales across the space as rapidly falling token prices exacerbated the losses of holders and collectors who saw their valuable art pieces lose up to 90% of their value overnight.
Despite concerns of inflation in the wake of Covid-19 stimulus spending, the US Federal Reserve is issuing assurance that everything is under control as criticism continues to mount.
RT’s Boom Bust talks to Michael Pento of Pento Portfolio Strategies about the current situation and his forecast on what to expect.
Pento says that the total debt of the United States is now 400% of GDP; that’s including national debt, government debt, individual and business debts, and others. “So, the bond bubble holds the key to everything.”
He points out that “The US Treasury sold $ 40 billion in T-bills [Treasury bills – Ed.] last week at an interest rate of zero. This is the most epic bond bubble in the history of all bubbles. So, it’s all contingent on free money forever, and it’s not going to last very long.”
“The Federal Reserve is telling you ‘Don’t worry about inflation cause if it gets out of control (which it already has) we have the tools to stop it.’ Oh, what are the tools – raising interest rates? And when you raise interest rates, you pop all the bubbles concurrently.”
Defying all the odds, meme-based cryptocurrency Dogecoin has risen by a whopping 300% in the last seven days. It has doubled in price in the last 24 hours, adding about $ 19.9 billion, hitting an all-time high of $ 0.29 on Friday.
Dogecoin, which was initially launched as a joke to mock other cryptos, is now a top-10 digital currency with a total market value of $ 34 billion, according to crypto market data site CoinGecko. It has delivered 12,600% in gains in a year and likely created a number of millionaires.
The digital token’s impressive growth and its latest rally have been attributed by some to tweets by billionaire Tesla CEO Elon Musk. On Thursday, Musk again posted a cryptic tweet saying “Doge Barking at the Moon,” likely in reference to the popular crypto slang phrase “to the Moon.”
Musk has been calling dogecoin his “fav” cryptocurrency and “the people’s crypto.” However, some crypto investors have been raising concerns about Musk’s dogecoin tweets. Nic Carter, co-founder of Castle Island Ventures, warned that retail investors “are going to lose money on dogecoin,” calling it a “vehicle for speculation.”
An analyst at UK investing app Freetrade, David Kimberley, also said that “dogecoin’s rise is a classic example of greater fool theory at play.” He told CNBC that “people are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up and then they can sell off and make a quick buck.” Also on rt.comCrackdown on cryptocurrencies may be coming, warns Kraken CEO
Kimberley added that “when everyone is doing this, the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time. And it’s almost impossible to say when that’s going to happen.
“This is doubly the case in the crypto markets where a small group of players often hold a huge chunk of the total number of ‘coins’ in circulation. That means it only takes one person to dump all their holdings for the entire market to tank,” he said.
“But alongside Quadrant we have the merch so we have our first drop, which is coming soon, first release.
“I’m interested and intrigued by it, and I like it a lot, and I like wearing my own things, which are normally joggers and a jumper kind of thing.
“I like shoes, I guess I’m quite into my shoes and things like that. I have an idea of what I like, I wouldn’t say I’m the most stylish or fashionable person you’ll see walking around but I like certain things, and that will show, and my likes will show in the clothing we have coming out, both next next month, but also throughout the whole year and different releases we’re going to be having and over the next however many years hopefully.
“I’m not a professional in this area, but I have some things, some tastes that I like, so that’s what you’ll see over the year.”
The price of the world’s highest-valued cryptocurrency, bitcoin, could skyrocket as high as $ 300,000 in the current bull market based on its historical patterns, says Bobby Lee, co-founder and former CEO of crypto exchange BTCC.
He told CNBC that the bubble will burst after peaking and the crypto could see declines for years.
“Bitcoin bull market cycles come every four years and this is a big one,” Lee said, adding: “I think it could really go up to over $ 100,000 this summer.”
The chief executive of crypto wallet Ballet, Lee explained that two of these “mega bull market cycles” have occurred over the last eight years, with the last one in 2017, when the price of bitcoin surged to nearly $ 20,000 by the year end from about $ 1,000 earlier that year. Also on rt.comBitcoin worth more than Visa & Mastercard combined
Still, a “bitcoin winter” that could last for years may hit the digital currency following its bull run, according to Lee. “It could go down by quite a bit and that’s when the bubble bursts. In the bitcoin crypto industry, we call it ‘bitcoin winter’ and it can last from two to three years,” he said.
The entrepreneur also warned investors to be aware that bitcoin’s value could fall as much as 80% to 90% of its value from the all-time peak. “Bitcoin is very volatile, but the rewards are risk-adjusted, I think,” Lee said.
Bitcoin entered 2021 at around $ 30,000, reaching multiple record levels since then. It surpassed the $ 60,000 milestone earlier in March, and was trading at $ 57,488 on Monday at 08:10 GMT.
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Shares of the US electric car producer Tesla are going to see a sharp fall as interest rates are rising after the Covid crisis, says Lansdowne Partners fund manager Per Lekander.
He told CNBC that he thinks the company is in a bubble and that he took a short position on Elon Musk’s firm, meaning he will profit if the value of Tesla’s stock drops.
Tesla’s market value surged to over $ 800 billion in the 12 months leading up to January, before sliding back to less than $ 600 billion in February. It now stands at around $ 679 billion.
“My take is that this year is going to be the comeback for the incumbents,” said Lekander, adding that German carmaker Volkswagen is the company that he’s particularly bullish on. VW is currently valued at €119 billion ($ 141 billion).
“There are a few golden nuggets, which I think are going to be long-term winners,” Lekander added. “In the short term, my guess if I’m right on the macro call that interest rates go up and the market wakes up to [the fact that] the incumbents are not as badly positioned as they think, then yes, I think Tesla is going down.” Also on rt.comElon Musk declares himself ‘Technoking’ of Tesla, company’s CFO now its ‘Master of Coin’ – SEC filing
Lekander also made some comparisons to the dot-com boom of 1999, saying: “If you think about the visionaries who talked about the internet in 1999, if you now listen to them, they are actually underestimating what happened. The development was even more radical than what happened.”
He pointed out that Cisco has a much higher market value today than it had in 2000. “It didn’t stop it from going down 80% first.” The equivalent in Europe was probably Nokia, according to Lekander, as the company also went down 80%. “I think that is what we are going to see here in this tech spec hype space,” he said.
For more stories on economy & finance visit RT’s business section