Eventually, this pumping will tail off as the number of people willing to keep plowing money into Ethereum and NFTs will begin to ease. Given that this system relies on constant growth, it seems a safe bet that the value of these “rare” items might start to fall, and those countless investors who spent thousands of dollars on low-res pictures of a puppy might want to get their money out before it collapses completely. Otherwise, what are you going to do with that puppy? Print it and hang it above the toilet?
Prices might not even need to stagnate for people to sell. They just need to stop rising as rapidly, and suddenly, it will seem like a safer option to have dollars in your Chase account rather than Ethereum in a wallet where its value has already been seen to fluctuate by 20% in a single day. Once investors’ confidence is dented, the collapse could happen quite quickly.
Ethereum increases in value when people keep buying Ethereum, and this simulated ownership of supposedly rare digital assets has manufactured demand. Cryptocurrencies are desperate to find a reason for people to swap their dollars for a slightly more imaginary monetary system, and NFTs are the latest solution. When it reaches saturation point, the market will adjust, and it could be messy.
This bubble will burst; it’s just a matter of when. {read}