the nft bubble might bursting already

 

The National Futures Association (NFA), a self-regulating organization of the futures markets, is investigating claims that nft - the new futures trading platform based on the Ethereum network - has been in operation for over five years and was never properly licensed before."

It's been a long time since the financial industry has seen an innovative technology such as blockchain. Thousands of people have invested their hard earned money into purchasing crypto assets using traditional currencies. These asset holders believe they are buying real or settled crypto assets at market price instead they are actually purchasing shares issued by companies with hopes that its value might increase in future which may not happen as promised.

Image source: https://www.billionaireclubnft.com/

"Some industry participants speculate that some of the smaller market participants could be operating in a gray area when it comes to compliance, said Dalia Blass, director of the Division of Investment Management. Any person or firm that lends its name to even an unregistered ICO risks legal exposure and the peddling of unregistered securities. Others are bluffing; they say there is no way regulators will ever catch up."

The main issue with such a new technology is that many people who purchased crypto assets during last year do not know what they are actually buying as most of these projects are unlicensed.

Image source: https://dribbble.com/tags/nft_monkey

"The question is whether or not the regulator will want to follow up the money. While these companies may be able to stay afloat for a number of years, the longer they continue, the more likely it is that people will get burned."

Regulators are beginning to pick up on this and they have started a few investigations but their knowledge of this technology is still limited and very likely they have no clue what exactly blockchain is as it's so new.

"While we're certainly concerned by this growing trend, we understand that there are many legitimate businesses operating in new ways, some of which are taking steps toward compliance and in some cases registering with our regulatory bodies. All of this is part of an ongoing dialogue between the industry and regulators, and we're committed to working in good faith with them."

 Image source: https://opensea.io/explore-collections

It's also not surprising as there are some financial institutions which are betting huge amounts of money on such new technology. The average person might think that such companies must be completely safe but history tells us that many unlicensed projects ended up successfully scamming the public in order to make get-rich-quick schemes while they simply got rich at the cost of other people who have been taken by such unregistered companies. There's no way we can really trust these companies as they are not regulated by any government body and there's no way we can know what new scams these businesses will pull off in future. Some of the most famous coins in the crypto world are all going through tough times."

The bubble is bursting. The nft bubble might bursting already. In this article, we will try to find out what is going on with this crypto craze and go over a few instances of the nft bubble bursting.

 Image source: https://mintspace.io/product/681-monkey-nft/?v=c86ee0d9d7ed

NFT, short for "non-fungible token", is a way to represent unique digital assets, such as shares and collectibles that can't be replicated or forged. NFTs are a type of ERC-721 token that has its own address on the blockchain and can hold any number of other tokens within it, such as game items or cryptocurrency units.

The nft blockchain solution was realized by an individual named Tom Williams, who has been a long time supporter of cryptocurrencies. In the case of NFTs, he is currently an adviser for such projects as SIRIN LABS. (SIRIN LABS is also behind the ELA tokens that you read about in this article.)

It was only this summer that he announced his idea and started to develop the protocol for it. He created a framework and a token standard which would allow other developers to build their own nft applications. So far, over 1,400 types of assets have been created and are now traded on at least 15 exchanges around the world.

Naturally, the trading volume of these assets began to skyrocket. The price of ERC-721 tokens shot up to the moon, and initial coin offerings (ICOs) that offered new digital assets began to sell them for outrageous sums. "Blockchain hysteria" was in full swing.

At its peak, the price of one CryptoKitty had reached $170,000 before it was sold and that's just one example among many.

Image source: https://womanofsolana.com/wp-content/uploads/2022/04/25-1.png

All this excitement is setting the stage for a blow-up of the NFT bubble. It is very likely that it's going to burst soon, and with it will go billions of dollars.

This is how crypto developer Fred Ehrsam describes this phenomenon: "You have certain tokens that are being used as stores of value — these things are called digital gold. Then you have others that represent a right to something that's actionable — like Facebook or equity in a business, those are called utility tokens. We call the ones in the middle trading tokens.