Non-fungible tokens (NFTs), or cryptocurrency collectibles, have been a hot topic of conversation in both the blockchain community and in the general public. The market cap of NFTs is still relatively small compared to regular cryptocurrencies, but it seems to be growing. Recently, there has been a lot of speculation on whether or not there will be an NFT bubble burst or not, and when it will happen.
How to Identify an NFT Bubble Burst
The number of unique tokens in the market is growing, and assuming that this same growth rate continues, it would mean that a lot more people will be holding unique tokens, not just owners of the token. Therefore, it is expected that there will be an increase in the price of these unique tokens.
This spike in unique tokens would hypothetically trigger speculators to buy tokens and cause their value to go up. Some NFT investors purchase them simply because they believe these tokens could be worth much more in the future.
While NFT’s have been all over social media for quite some time now, new ones have been created every day. According to a report published in CoinFrenzy, the current number of unique tokens listed on websites like OpenSea and RareBits is estimated to be around 4,000. This means that for every NFT creation listed on these websites, there will be an increase in the value of NFTs. Although this means that there could be an increased rate of growth in the value of these tokens, it also puts a lot more tokens into circulation.
Dapper labs Crunchbase data tells us that the market cap of NFTs was relatively small in 2018. For instance, at their peak during the first quarter of 2018, the total market value of all NFTs was about $50 million. But, by the fourth quarter, the market cap had almost doubled to about $100 million. The main reason for this growth was a result of an increase in token prices caused by speculation and people looking for a new opportunity to make money off cryptocurrencies.
The number of new users who buy NFTs is not expected to stop anytime soon. This could, hypothetically, mean a massive return on investment as more and more people join the crypto craze. The odds of a bubble bursting are higher when more investors and speculators are involved in the market.
When Will the Burst Occur?
Crypto enthusiasts have been wondering what it will take to break the NFT bubble. While some people think it could possibly burst at any time, others believe that it will be quite a while before it bursts. Statistics have shown that not all tokens following the ICO model have died out, with a few that continue to be traded. The fact is that only a handful of these tokens are used in daily transactions since most of these tokens are intended for speculators and collectors alike and thus have more niche uses.
Crypto enthusiasts feel that the market will burst when the government initiates regulation. Since there is a lot of use of NFTs in illegal activities, there is no doubt that they will be banned eventually. Regulations could be started on a global scale, which would mean a huge loss of funds for the NFT industry.
Since most people who invest in various cryptocurrencies are aware of this fact, they expect to lose all their money and look forward to winning large amounts of money in the process. The crypto market is quite small compared to other financial markets, and that means it will take some more time before regulation happens.
Axie Infinity, an NFT based online game, produced a white paper that describes and enables a depth of the digital asset trade by facilitating the on-chain exchange of NFTs. In addition, it will also serve as a platform to facilitate new financial products and services.
From a Niche to a Marketing Tool
Since most of these tokens are used as cryptocurrency collectibles, it is no surprise that they have dropped in value. The hype surrounding these tokens has also died out, and most investors have been left with a bag of worthless tokens. All the hype was when they were being sold as ICOs, and now that more people own them, their demand has dropped.
So far, many businesses are using this technology to create assets for their initial coin offerings (ICOs). They are using tokens to raise money by selling special coins, which will be used to pay for the initial products. The fact that NFTs were marketed and sold exceptionally well during their ICO will likely not happen again any time soon as those in the industry are aware of the real value of these tokens.
As the ownership of these tokens grows, their demand as investment vehicles will also increase. Therefore, it is expected that there will be more ICOs in the future, with more people looking at these tokens as an investment tool. All this is to say that NFTs will continue to grow and multiply until they become a widely accepted form of investment.
The NFT music marketplace has also created a niche by being the only platform that promotes unique music releases. Since the release of these songs is unique, they have become a very sought-after investment.
The owners of this token have been doing an excellent job of marketing their product through music festivals. They claim to have over 60 000 people in attendance for the two music festivals they host every year. The festival invites thousands of people from all over the country to attend and purchase their products.
How to Profit from the NFT Boom
Despite the chances of a bubble popping, there are still many ways to profit. This can be done by investing your money in TokenStars. This blockchain project has revolutionized sports and entertainment, making it possible for fans to connect with their favorite celebrities.
The project has already brought together 500 million dollars worth of investments from various mainstream businesses. With the revenue generated by token sales, the TokenStars platform allows you to invest in superstars and celebrities without going bankrupt or in debt.
By using the multicurrency crypto wallet provided by this platform, fans can become sponsors of their favorite athletes and celebrities.
You can also use the Fortnite Epic Games generator to collect and sell tokens on TokenStars. The most popular one is the OST token, which can be used to pay for services on the platform.
Becoming part of this system is easy since you do not have to spend any money or time following the instructions. You just need to complete an ICO whitelist registration when purchasing these tokens, and you will automatically become a shareholder in TokenStars. This will give investors a chance to make huge profits while they wait for the NFT bubble burst to occur.
Final Thoughts
The NFT industry is very promising, and it is expected that their value will continue to increase in the future. While there is always the chance of the NFT bubble bursting, it will likely take a lot of time before that happens. The market for NFTs is still relatively small, and the industry is still in its infancy, so it’s no surprise that some investors call it a bubble. Whether or not it is one is yet to be seen.
It is likely that NFTs are here to stay, and it will take some time before they completely lose their value, so if you want to invest it’s good to start as soon as possible.
Featured Image: Megapixl
