NFT project analyst Mateen Soudgar predicts that if the price of BTC and Ethereum rises to $ 100,000 and $ 10,000, most NTF projects will suffer significant losses and are likely to collapse.
According to Soudagar, 60 to 75% of existing NFT projects are fraudulent. In addition, as demand is driven by speculators, many will begin to go crazy as BTC and ETH prices rise sharply.
“NFT projects where people were mostly in it [to] flip will probably take a hit. And may possibly not recover,”
Soudagar, who appears on Twitter under the nickname Matty, told his 122,000 followers and continued the thread:
“Currently, there is a large crowd of speculators around the NFT market. Many new investors will be scared when prices fall, which will create more sales. “
To the Moon?
BTC climbed to a record $ 67,000 on October 20 after the approval of the first U.S. exchange traded fund (ETF) based on BTC futures. Since its low of $ 30,000 at the end of July, the value of this reference cryptocurrency has more than doubled.
Based on Plan B’s stock-to-flow model, analysts expect institutional involvement to drive the price to $ 100,000 by the end of the year. Similarly, ETH, which has also reached an all-time high of more than $ 4,000 in recent days and is speculated to be trading at around $ 10,000 a coin during the fourth quarter.
Let’s look at the NFT area, and here too the value has risen sharply recently, with trading volumes exceeding $ 15.5 billion (from just a few thousand in 2017, when the purchase and sale of tokenized digital works of art began).
The nonfungible tokens sector is dominated by the Opensea market, which recorded a total volume of $ 9.5 billion, followed by the Axie Infinity market with $ 2.7 billion. Both platforms work, like most other marketplaces, on the Ethereum blockchain.
The persisting power of NFT
In a Twitter thread, Soudgar drew parallels between the behavior of altcoins (essentially any other digital asset other than BTC) and the behavior of the NFT.
He found that many NFT projects “follow the same sentiment” as altcoins – falling sharply whenever BTC is on the rise, as money moves from smaller coins to BTC.
“Just as alts get hit when BTC or ETH reach historical highs, so does the NFT. Good alts should thrive in the long run As well as nonfungible tokens “
However, this only applies in the short term. Matty has worked out various scenarios for those who are going to serve the NFT for a long time
He expects that “only projects he describes as good quality” will have a chance to survive in the event of a collapse in NFT prices. But it also offers an alternative where NFT prices rise if the expected cryptocurrent bull run lasts several months.
We can think of anything about the NFT, but one thing is for sure, the market for them is constantly growing and interest in them has not waned yet. But can they survive in this form, or is it just a fashion fad, when in the case of the bear market, the grain is separated from the chaff and only the really good ones survive?