Einvestment Fund: NFT Revolution Looks Like an Overhyped Bubble Driven by a Flow of New Users
Lisbon, Portugal--(Newsfile Corp. - March 16, 2021) - The NFT (Non-fungible token) market is rapidly growing. Last week, the volume of transactions surpassed $40 billion, while the number of sales almost reached 24,000, according to the data from Nonfungible.com. Einvestment believes that an NFT revolution is an overhyped bubble that may blow at any time.
A non-fungible token (NFT) is a unique digital file verified on a blockchain. NFTs are sold as digital artwork in auctions. Recently they started to be popular in dApps (decentralized apps) as unique items.
According to our research, the majority of users invest in graphical NFTs in order to immediately resell them at a higher price. However, the speculative nature of these investments is dangerous: traders may lose everything as soon as the hype stage passes.
Reselling items high is difficult already. As we have noticed, after 3-10 resales, the price of an NFT reaches a maximum of $1,000 or $2,000 and stops. Some even resell the graphics lower than the purchase price.
NFT is also a risky market because it's becoming associated with gaming dApps. Such software includes gambling elements with possible loss of capital. dApps may attract gamblers worldwide, but because they don't fall under gambling regulations, their founders can easily violate gambling laws.
"We encourage investors to realize that NFT is an extremely high-risk investment opportunity with overvalued digital assets and a high chance of collapse. According to our estimates, the market will rapidly fall when the flow of resales stops. This can happen anytime as investors already start to lose money, being unable to resell the unique digital artwork at a higher price. Nevertheless, the technology shows the potential for the future. When it matures, it can become highly usable for sports fans, celebrities, or brands' loyalty programs", says Einvestment's Executive Director, Martha Vodvik.
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