This is why experts remain skeptical of the NFT market

Irreplaceable tokens (unique digital assets validated and stored using blockchain technology, such as artwork and sports trading cards) exploded in popularity in 2021. People create, collect, and trade NFTs and trade for millions of dollars. future. However, experts are still skeptical that NFTs are a good investment.

The NFT surge is still quite new, but huge amounts of money have already been exchanged among collectors. For example, according to NonFungible, which tracks NFT’s historical sales data, NFT collections have generated over $ 6.2 billion in sales and digital art has generated over $ 1.9 billion in sales since 2017.

According to John McCormack, a professor of computer science at Monash University, “I think things like artwork and collectibles have become a big product of NFTs because they naturally fit into what NFTs are.” “Digital is copyable, and having this additional Certificate of Authenticity is very important to show ownership of that particular thing.”

Researchers are worried that it may be a bad time to enter a market that has grown too fast under huge hype and speculation. For example, NFT trading volumes increased 38,000% year-over-year to $ 10.7 billion in the third quarter, according to an analysis by DappRadar, a company that helps track NFTs and other decentralized assets.

“This is a deification and is likely to be the peak of all bubble paradigms,” said Michael Every, Head of Financial Markets Research at Rabobank’s Asia Pacific region. “I’m very worried, especially if I have a good understanding of the dynamics that drive young people.”

Experts suggest buying NFTs not because they want to participate in hype, but because they want to own them.

“Don’t buy it because it’s an NFT,” said Vincent co-founder Evan Cohen. “I buy it because I like art, or because I think the collection is cool and the community is cool. I want to participate in assets, not the underlying technology that supports this.”

Watch the video to learn more about how NFTs act as investable assets. This is why experts remain skeptical of the NFT market

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