The last bull run of 2017 was defined by the initial coin offering craze, which took a turn for the worse with foreseeable consequences for overvalued projects that had little more than a team and a poorly written white paper. While many useful projects were able to blossom from the ICO era, including Ethereum and others, most have come and gone with the wind, leaving thousands of unwary investors holding on to worthless bags of tokens.
A full market cycle later, and there’s now yet another rally that seems to be expanding over multiple sectors of the crypto industry, especially in decentralized finance. A lot has changed since 2017. Regulators have cracked down, investors have gotten smarter and the space has matured.
Although ICOs are still relevant today, having morphed into other forms of fundraising events — like security token offerings, initial exchange offerings and initial decentralized exchange offerings — DeFi and nonfungible tokens, or NFTs, are now the popular kids on the block.
NFTs seem to be the next hot topic in crypto, and while the numbers are still relatively small, engagement and interest seem to be rising fast. It goes to show that the sector has a lot of room for growth.
NFTs are a different class of cryptocurrency tokens. Unlike Bitcoin (BTC) or Ether (ETH), they are used to represent various types of assets that differ in value among themselves. These assets can either be digital or physical. Popular examples include artwork, land or real estate, and even people.
Trump-inspired art piece sold for $6.6 million
Inspired by the 45th United States president, an artist known as Beeple created an NFT called “Crossroads.” The piece of art, a holographic animation depicting a defeated Donald Trump lying naked in the grass, was originally sold for $66,666 back in November 2020. However, it was recently resold to an anonymous buyer for $6.6 million, breaking the previous record of $1.5 million for a single NFT sale.
Beeple is also on the verge of breaking another record: the highest sale of a single NFT through an auction house. His new piece — a work of 5,000 unique images about the somber aspects of technology, politics and wealth — is up for auction until March 11, with bids starting at $2.2 million.
Cointelegraph Magazine: NFT ‘art revolution’: Beeple on his 5,040-day labor of love
NFTs are blowing up
The recent developments are simply the latest in a string of fascinating headlines regarding the NFT space, and it’s not just artists that are cashing in on these types of tokens. Empowered by the independence and provable authenticity of NFTs, many celebrities, musicians and film producers are also getting involved.
Perhaps the most flagrant example of this is the recently minted Pokemon-inspired NFTs released by Logan Paul, a popular YouTuber, which raised over $3.5 million in a single day. The release featured 3,000 NFTs inspired by the Pokemon card game, and there were 44 limited-edition holographic versions featuring Logan Paul himself as a Pokemon.
On Feb. 28, another record was broken when popular musician 3LAU sold the first-ever NFT album for a whopping $3.6 million. Other noteworthy examples include the musician Grimes and Mike Shinoda from the rock band Linkin Park. Even the iconic TV show Rick and Morty now has its own crypto art stamped on the blockchain, which makes sense given the sizable crossover in the demographics of the show and the crypto space.
A genuine art movement or a cash grab?
The possible symbolism behind the bizarre dollar figures for which Beeple’s Trump piece was resold ($6.6 million), coupled with the fact the latest buyer wished to remain anonymous, leaves some unanswered questions regarding the legitimacy of the NFT art movement overall — especially when one considers how art has been traditionally leveraged by the wealthy as a means to reduce tax expenses.
Although the value of NFTs comes from their scarcity, not everyone agrees with the astronomic values, with many industry commentators calling out digital art purchases as being nothing less than nonsensical.
Is NFT art being used as a way to launder money or evade taxes, a practice not uncommon in the traditional art world, or is it truly the latest craze in the crypto and art worlds — one that is possibly here to stay?
Sébastien Borget, co-founder of NFT-based gaming platform The Sandbox, believes there is substance behind the NFT movement and that the hype we are currently witnessing has been slowly brewing for years. He told Cointelegraph that a new paradigm is emerging due to the limited supply of digital collectibles:
“Those witnessing a large number of records in the industry at the beginning of this year may not realize how long this has been building. A number of products have been boiling and building for the past three years and are now ready for mass adoption.”
The history of NFTs
Almost as old as Bitcoin itself, the very first experiments with NFTs were created back in 2012 and were dubbed “Colored Coins.” These were initially issued on the Bitcoin blockchain through protocols like Counterparty and Omni and were sometimes as cheap as 1 satoshi, the smallest unit of account for Bitcoin. These were meant to represent a multitude of assets and have different use cases. Colored Coins eventually fell out of use but were instrumental in paving the way for the future of NFTs.
When the market finally caught the eye of the mainstream public in 2017 with CryptoKitties, the virtual pet game became so popular that it was responsible for clogging the Ethereum network and setting a new all-time record for transaction volume on the blockchain at the time. Fast forward to 2021, and the whole infrastructure has become more robust and diverse.
A recent report by NonFungible shows that NFT transactions more than quadrupled in volume during 2020, growing from $62 million to more than $250 million. NFT art sales grew leaps and bounds, outshining any other category associated with the crypto sector. The number of active wallets also grew 97% between 2019 and 2020, an overwhelming figure to say the least.
The report also suggests that in the long term, NFTs will play an important role in the currently blossoming virtual economy, as people will invest more money and time into virtual goods and experiences. The report also states that the current capabilities are just the start to the different use cases of NFTs, which will be integrated into different industries. It may not be long before the first NFT-backed financial services surface. Examples may include digital insurance and collateralized loans.
NFTs impact different industries
The art industry seems to be in the NFT spotlight right now. It has been getting the most attention and experiencing unprecedented growth. However, it’s worth noting that other industries are following suit. Gaming is an industry perfectly fit for NFTs, and this has been made obvious by the number of existing crypto trading card games and also by the investments made by renowned gaming companies such as Ubisoft, with its Raving Rabbids game, and Atari, with retro art collectibles.
As previously mentioned, the entertainment industry also seems to be dipping its toes into the NFT waters, and not just for artists. Tickets for live events will soon be issued using NFT-based systems, which would mitigate the prevalent counterfeiting problem found in the ticketing industry.
Finally, sports leagues: NFTs are easily explained as a sort of “digital baseball cards,” so it would make sense to see major sports leagues start adopting the technology. That is already happening, with Formula 1 Delta Time, an official Formula 1 collectibles game, and NBA Top Shot, an officially licensed platform that allows for the best NBA highlights to be owned in the form of collectibles known as “Moments.”
Wilhem Pujar, co-founder and CEO of Stacktical — a decentralized platform for service-level agreements — shared a bullish vision for NFT sports collectibles, telling Cointelegraph: “Considering that Sports Betting is a $200B+ market, we can expect large amounts of capital to be reallocated to NFTs, which will act as both an emotional and financial hedge against empty stadiums and arenas.”
Although gaming, art and sports collectibles are the front-running industries for NFT adoption, there is underlying potential in other markets. Yat Siu, co-founder of Animoca Brands — a platform for branded blockchain gaming, including F1 Delta Time, MotoGP Ignition and other sports-related projects — believes NFTs can leave a mark in many other industries, telling Cointelegraph:
“Right now we see NFTs having a powerful effect on all forms of digital content such as digital art, collectibles, gaming, and most recently music, but eventually all others will follow: medical, fashion, financial, manufacturing, agricultural, insurance — you name it, and it will have relevant applications of NFTs.”
NFTs: Just another trend?
NFTs, and decentralized technologies as a whole, are changing the landscape for digital content creators and consumers alike. They allow anyone to monetize their work directly by connecting with fans and removing cumbersome middlemen. This ensures transparent ownership for their creations, which can be any type of digital media, be it photos, memes, GIFs, videos, music, books or even domain names.
Although there is still a long way to go before mainstream adoption is achieved, there are already signs of huge corporations stepping forward and becoming NFT pioneers. It’s highly likely that more recognizable brands will enter the space. Ian Friend, co-founder of DeFi project Ferrum Network, admitted that mass adoption by corporations has already started and is likely to continue, telling Cointelegraph: “It’s already happening. Big brands that fail to adapt this year will be playing catch up behind the first movers.”
It isn’t all about hype: NFTs may be responsible for a significant paradigm shift in digital content sharing across multiple industries, including art, gaming, real estate and more. They may even turn out to have a dominant presence in future virtual economies, especially in the esports sector where the biggest demographic crossover seems to take place among young, tech-savvy “geeks.”
Several industries will be disrupted, and the collectibles markets will be forever changed by NFTs. J. D. Salbego, CEO at AnRKey X — a blockchain-based protocol platform leveraging DeFi and NTFs for the esports gaming industry — told Cointelegraph: “We’re already seeing this in the form of engagement, where serious institutions have begun to recognize the value of unparalleled security, authenticity, and traceability for non-fungible assets in a digital setting.”
AgeUSD to Launch as First Stablecoin on Cardano Network
Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. The firm has since announced a partnership between the Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.
The AgeUSD stablecoin will be available on Cardano as soon as smart contract capabilities are launched on the blockchain, it revealed.
Do We Need Another Stablecoin?
Emurgo is aiming to prevent events like MakerDAO’s Black Thursday which emerged through vulnerabilities in its Dai collateralization mechanism. A mass liquidation of the vast majority of Maker vaults resulted in around $4 million in Dai being under-collateralized at the time in March 2020.
AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).
“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly,”
The stablecoin runs on the Ergo blockchain aiming to automate as much as possible within the mathematics of the protocol itself. Reserve providers pay Ergo’s native currency (ERG) to mint reserve coins which represent the underlying collateral. Users of the stablecoin can also deposit ERG into the reserves in order to mint AgeUSD, it explained. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to loan out funds.
The Cardano partnership will also enable its native token, ADA, to be used as collateral to mint reserves. However, the potential downside is that the stablecoin is only backed by these two assets whereas Dai is backed by multiple cryptocurrencies.
AgeUSD will launch on Cardano when it rolls out the Alonzo update that ushers in Plutus powered smart contracts. This is expected in the latter half of this year according to the roadmap.
Cardano ADA Price Update
As the long-awaited update nears, ADA prices have been cranking to new highs, the most recent ATH being $1.55 on April 14. At the time of writing, ADA was trading up 2% on the day at $1.45 according to Coingecko.
It is the sixth largest cryptocurrency by market cap which currently stands at $46 billion and there are 32 billion tokens in circulation. The token was briefly flipped by Dogecoin but has regained its position in the charts, just below Tether.
How sustainable is YFI’s current price run?
The past week saw a lot of growth across the cryptocurrency market, with Bitcoin and Ethereum seeing their values pushed towards new all-time highs. However, it is safe to say that the digital assets market is no longer just about the top two cryptos in the market, with DeFi coins such as YFI registering significant gains on the charts.
Over the past 6 months, YFI has seen its price hike by over 520 percent. Now, while this looks extremely promising for the alt, the truth seems to be in yet another shade of grey. The price hike from over $11k in November 2020 to its press time valuation of $48,415 has been less than straightforward.
Akin to many other altcoins in the market, YFI too has endured extended periods of the price going back and forth. However, given the current market scenario, how sustainable is YFI’s current price or is history going to repeat itself in the form of yet another short-term price correction?
Interestingly, data provided by Santiment highlighted that despite the bullish nature of the YFI market, there may be a bit of FUD finally creeping into the market as the price continues to remain close to the $50k-level. In such a scenario, what YFI really needs is a strong level of support for the price if bearishness is to soon hit the market.
Taking a look at a few of the key fundamentals can provide more clarity on where the price is likely to head in the coming weeks. According to data provided by Santiment, YFI’s supply on exchanges has been stagnant for a while and hasn’t been increasing. While fewer coins in exchanges are normally a good sign of hodling, in the case of YFI, if one were to take a look at past precedents, the price decline began as soon as the supply hit a stalemate.
Additionally, the analytics platform also pointed out that the current price rally began with low on-chain activity for the coin. However, over the past few weeks, a trend reversal has emerged, with on-chain activity noting a surge and the price continuing to be inversely relational to it.
With the price inching closer to its ATH, there is always the question of price discovery. YFI seemed to be lacking in this regard, at press time. The coin’s MVRV, as per Santiment’s data, placed it in the danger zone and prime for a new trend reversal, one that can induce a short-term price correction.
In the coming days, if the price correction does set in, YFI’s $44k-price level may end up being a key support level for the coin. However, if this level is flipped to resistance in the coming weeks, a lot of the upward momentum and price surge YFI saw over the past few months might be undone.
This, once again, will result in YFI’s price continuing its current trend by which the coin will be subject to strong ‘push and pulls’ at regular intervals.
EOS, Synthetix, Maker Price Analysis: 16 April
EOS can be expected to find strong support around the $6.8-zone. If Bitcoin stabilizes above the $60.5k-area, altcoins could have a chance of recovery in the coming days. Otherwise, it would be further selling pressure across the market. Synthetix and Maker posted gains over the past few days, but were likely to retrace a significant portion of their value.
EOS was trading within a rising channel, and the past few hours saw the price test the upper boundary of the channel before falling lower.
The mid-point of the channel was ceded to bearish pressure. A region of demand lay just above the $6.8-mark. The confluence with the channel’s lower boundaries could serve as strong support for EOS.
The RSI was back at neutral 50 and would drop lower to signal a shift in momentum to bearish over the next day or two, especially if EOS closes a session under $6.8. This could see EOS fall further to find support at $5.6.
Synthetix ascended past the $21. 4-level of resistance, but its retest of the same level on the back of strong selling forced the price to drop to $20.7 and could drop further. On the 4-hour, the Supertrend indicator continued to give a buy signal that would only be flipped to sell on a session close under the $19.5-level.
The 20 EMA and 50 EMA (white and yellow respectively) highlighted the bullish momentum behind SNX in recent days, with the price not sinking under these moving averages yet.
The OBV was on an uptrend and suggested that the recent spate of selling was reactionary fear, rather than sustained selling.
Two sets of Fibonacci retracement levels were plotted to highlight some levels of importance for MKR. $2,400 is a level that MKR had been stuck under from late February till the past week. The surge past this level in recent days has been rapid, and the price did not stop at many areas to mark it as support or resistance.
As such, the move back down could be almost as rapid, and some of the Fib levels laid out possible areas of support for MKR.
The MACD was correcting lower after the MACD line rose high above the Signal line to indicate overbought market conditions.
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