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The End of NFTs? NFT Sale Transaction Volume Down 95% Since Early May

The NFT price crash that started in May is continuing. What does this mean for non-fungible tokens?

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The drop in non-fungible token sales that began in early May seems to be continuing into June.

Finance Magnates previously reported that according to data from NonFungible.com, the week-long period surrounding the NFT market peak at the beginning of May saw $170 million in transaction volume. By the end of the month, that figure had collapsed to just $19.4 million in NFT sales, a decrease of roughly 90%.

According to a new report from CNBC, the drop has continued. On June 15th, the seven-day average NFT transaction volume had fallen to oust $8.7 million. Compared to the market’s peak in early May, the new number represents a drop of nearly 95 per cent.

Is this the end of non-fungible tokens?

via Protos

The Boom and Bust of Non-Fungible Tokens in 2021: A History in Brief

While this may not be the end of NFTs, it’s certainly the end of an era. Riding on the tailwinds of the biggest crypto bull market in history, non-fungible tokens made a serious splash when they entered the mainstream in March of 2021. By that point, NFTs had already been around for several years.

However, they had never previously captured the public imagination in such a big way. Investors and speculators saw a new opportunity to try and win big in a rather novel financial market; artists and creators saw a new opportunity to monetize their work in the digital world.

For some, the opportunity paid off–big time. Graphic designer Mike Winkelmann, also known as “Beeple,” sold an NFT for a record $69 million at a Christie’s auction in March. Around the same time, Twitter CEO Jack Dorsey, sold a tokenized version of his first tweet for $2.9 million the same month. Grimes, Eminem, 3LAU, Lindsay Lohan, and many other celebrities also cashed in on the trend.

However, it wasn’t long before the cracks in the walls of the NFT space started to show. Critics of non-fungible tokens decried the practice of minting them, pointing to the possibility of heavy carbon footprints. Many smaller creators who were entering the space for the first time quickly discovered that someone else had already stolen and tokenized their work, much to the chagrin of the collectors who had purchased the fraudulent tokens.

Additionally, reports of “vanishing” non-fungible tokens began to hit headlines as questions about what it really means to own a non-fungible token went unanswered. Because the material that an NFT is associated with is not stored in a Web 3 environment, it is subject to the same kinds of problems that all centralized media is: if an NFT-tied photo disappears from the web, well, tough luck.

Now That the Hype is Over, What’s Next?

At first, the criticisms of non-fungible tokens didn’t seem to significantly affect the space. However, when cryptocurrency markets were hit with bearish forces in mid-May, non-fungible token markets were decimated. Analysts who operate outside of the cryptocurrency space have written the whole saga off as another crypto fad–novel, exciting, and perhaps interesting, but essentially vapid and hype-driven.

However, Gauthier Zuppinger, the chief operating officer of Nonfungible, told CNBC that the NFT market movements of the last several weeks are closely related to one another: “The thing is that, each time you’ll notice such a quick increase on any trend, you’ll see a relative decrease, which basically stands for a market stabilization,” he told CNBC.

via CNBC

And indeed, data from Nonfungible.com show that after this 95% decrease from the NFT market peak in early May, NFT sales are basically continuing along the trend of slow and steady growth that has been trending over the past several years.

“High-profile NFTs selling for millions of dollars was a sure sign that the market was treating them as speculative assets,” said Nadya Ivanova, chief operating officer of L’Atelier, speaking to CNBC. “And by definition, markets for speculative assets are unstable and liable to dry up.”

“The bigger question for NFTs is their long-term value, which we believe is likely significant,” she continued.

In other words, now that the hype is over, non-fungible tokens can continue along their path of technological discovery.

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NFTs in Virtual Reality and Beyond

While the most commonly known use-cases of non-fungible token technology surround the concepts related to digital authenticity and ownership on the internet as we know it, some innovators are exploring an entirely new environment for NFTs: virtual reality.

Forbes recently reported that Space Force partnered with digital artist companies WorldwideXR and VueXR to release their own NFTs with augmented reality features. According to the report, the NFTs are accessible to their owners through the VueXR app, which is available on both iOS and Android.

“As augmented and virtual reality technology matures, normal people are going to spend more and more of their time — and therefore money — in virtual environments,” Nadya Ivanova told CNBC.

Non-fungible tokens have already made a splash in the gaming world as technology that could make decentralized ownership of in-game assets into a reality. However, as gaming moves increasingly toward virtual reality, NFTs could take digital ownership to the next level.

“World-builders in VR are looking at ways to make world building a lot more profitable, but there are few companies that are willing to put down money for a virtual world,” said Dale Deacon, who is an expert on developing immersive storytelling in VR & AR. He was speaking to VRScout.

NFTs could provide a path toward real-world monetization in virtual economies. “Monetizing the job of being a VR world builder, will be a part of monetizing the role of a world builder.”

Now that the hype is being washed out of the non-fungible token space, it’s possible that VR innovators could explore their use cases in a more serious way. “I’m interested in AR and VR spaces as NFTs [because] they have a practical value,” said Dale, adding that “the hype around NFTs” made them a bit “myopic.”

While NFTs may not be the end-all, be-all for VR world builders and other creative economies, they could be part of an important shift that allows creators to have access to new kinds of economic tools.

“The shiny thing that NFTs are at the moment, is not the end goal of this whole decentralized finance – where standard banks have proper competition for once,” Deacon explained.

Now that the Hype is Over, True Innovation Continues

Beyond virtual reality, non-fungible tokens are also finding new use cases in the music world. Others

“We have only seen the tiniest part of where this is going,” said Geoff Osler, CEO and co-founder of NFT app S!NG, to CNBC. “Cryptocurrency is here to stay — and NFTs mean there is now something to buy. It’s the other side of the equation. And this is going to go a long way past digital art. We think music is next.”

Other use cases for non-fungible tokens have been identified in identity, travel, live entertainment, medicine, supply chain, and many more industry verticals. Still, quite a lot of innovation will likely need to take place before the technology can take hold in any industry in a meaningful way.

Now that the NFT hype seems to be over, companies and innovators that have been working to improve non-fungible token technology will continue to build for the future. Watch this space.

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Source: https://www.financemagnates.com/cryptocurrency/news/the-end-of-nfts-nft-sale-transaction-volume-down-95-since-early-may/

Blockchain

“Bad For Bitcoin”: Congressman Warren Davidson Blasts Last-Minute Crypto Tax Insertion In Infrastructure Bill

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Biden's Tax Plan Could be Bullish for Ethereum but Bearish for Bitcoin

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As the U.S. Senate plans to hold a popular vote on the proposed infrastructure bill under which a last-minute cryptocurrency tax law was introduced, some believe that the whole bill is ill-fitted due to its vagueness and could prove colossal to the industry and by large, the U.S. economy.

Privacy Concerns

The law, which seeks to subject players in the crypto space to the same regulatory rules placed on various securities such as stocks has disgruntled some industry players as well as legislators who feel that its language is detrimental to the crypto industry. In essence, the government aims at individuals and institutions not only reporting on gains and losses but also any activity associated with crypto, such as the sale of mining equipment.

Congressman Warren Davidson who coined the cryptocurrency language in the proposed infrastructure bill as “the big bank protection act” particularly believes that if passed, it could spell adverse problems on a big chunk of crypto-related activities that might not even need to be taxed. 

The congressman who is an ardent supporter of bitcoin speaking to Bitcoin magazine added that he was not a fan of governments spying on virtually all individual activities with one’s money, especially using the 16th amendment.

“The government just seeks to know too much about you. It really is not the government’s business as to whether you got paid or you ended up paying somebody, did you buy or sell something, gain or lose money – this extends that logic way beyond just collecting taxes, it collects all kinds of information.”  

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Sloppy Language

Davidson further criticized the language in the 16th amendment now inserted to serve in taxing crypto-related activities, terming it as sloppy, dangerous, and must have been advanced by people who were ignorant about the cryptocurrency industry or by people intending to only destroy it.

“Either this language was skilfully crafted to completely new crypto in America or it was willfully ignorant, I mean you would have to work hard to be that ignorant about how much collateral damage this kind of sloppy language would cause ” he added.

He called on Bitcoiners to raise their voices to their senators on the colossal harm the proposed bill could cause to them, and for the country as it threatened not only financial stability but also innovation.

Jerry Brito, the executive director of Coincentre had also raised alarm over the proposed infrastructure bill seeing that it has a provision that could be very bad for crypto, forcing non-custodial actors including miners to comply with IRS tax reporting obligations. He echoed Davidson’s concerns over the broadness in wording which potentially covers miners and DEXs. 

He was however relieved at the fact that arguably miners and DEXs did not have “customers” as defined in the tax code. He posited that despite the last-minute addition to a must-pass bill, he and other stakeholders were working around the clock to make sure that the bill was not passed in its current form ahead of Wednesday’s vote.

Portman spokesperson however sought to clarify the language on crypto in the infrastructure bill stating that the language did not redefine digital assets or cryptocurrency as security for tax purposes.

“It simply clarifies that any person or entity acting as a broker by facilitating trades for clients and receiving cash must comply with a standard information reporting obligation.” he said.

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Source: https://zycrypto.com/bad-for-bitcoin-congressman-warren-davidson-blasts-last-minute-crypto-tax-insertion-in-infrastructure-bill/

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Ethereum: Are you wrong to expect ‘changes’ from London

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Ethereum is days away from one of the most important system upgrades since its inception. The London hard fork, the implementation of EIP-1559, is expected to completely change the monetary and economic model of Ether and its network.

These changes are expected to take place after the commencement of the hard fork on 4 August. However, there have been other changes too, each of which has transpired over time for the altcoin.

The issue of transaction fees

One of the most discussed changes expected out of EIP-1559 is that ETH’s transaction fees will become relatively stable. Any entity wanting to conduct a transaction on the Ethereum network is required to pay a “gas fee.” The same is to be paid in Ether, to miners, to process these transactions. During the 2020-2021 bull run, these fees skyrocketed.

Source: Ycharts

In fact, according to the attached chart, the transaction fee was as high as $71 at one point. However, that aspect might end up being tackled before the hard fork itself.

Over the past few weeks, the gas fees for ETH transactions have drastically dropped on the charts. Now, many have suggested that this was due to the bearish market.

Source: Spencer Noon

However, a contradictory argument is that DeFi applications are still rampant. UNI and AAVE registered strong on-chain performances over the past few weeks, and major functionality within these assets rely on the utility of Ether. For both June and July, the Ethereum network’s fees were already under the yearly average. Such a healthy fee market allows for a stronger security budget for Ethereum.

Investment and trading are not the only ways to profit from Ethereum anymore

ETH held on Exchanges

Source: Glassnode

A common bullish argument for Ethereum in 2020-2021 was the fact that it registered massive exchange outflows. Here, the inference was that hodlers were taking the asset out of centralized platforms and simply holding their allocation. It might have been true in late 2019 and early 2020, but right now, the playing field has evolved.

According to data, exchange outflows have definitely increased but the key point remains that more and more Ethereum is flowing into smart contracts. Further, ETH users are pursuing other opportunities to earn interest and yields.

The rise of yield farming and interest lending platforms has opened new avenues for ETH users. The reason being that they are able to earn capital without depending too much on a bullish or bearish cycle.

Changes are coming but, “change” is already here

The industry is evolving at a break-neck speed and Ethereum is gunning towards its massive upgrade. And yet, users should not be expecting ground-breaking changes. In fact, those who are might as well be ‘wrong’ to some extent.

Over the past few weeks, Ethereum has already been incorporating changes that may define its functionality and usage going forward.

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Source: https://ambcrypto.com/ethereum-are-you-wrong-to-expect-changes-from-london

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Bitcoin Cash, Cosmos, VeChain Price Analysis: 01 August

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With Bitcoin soaring up to $42,000 today, other altcoins pumped too. BCH was preparing to test its immediate resistance, ATOM hiked by 8% overnight, and VET flashed signs of an uptrend. 

Bitcoin Cash

Bitcoin Cash, Cosmos and VeChain Price Analysis: August 1

BCH/USD, TradingView

Bitcoin Cash was trading at $554 on the back of a 2.1% gain over the last 24 hours. From the 4-hour chart, BCH depicted an upward movement towards its immediate resistance of $566. On failing to test the same, the prices could land near the $544 mark and then subsequently rest on $528. 

The Relative Strength Index despite noting a slight fall in buying pressure stayed well within the bullish territory. The green signal bars on the Awesome Oscillator depicted the presence of the bulls in the market.

Conversely, however, the MACD flashed red bars on the histogram at press time after a bearish crossover yesterday, although it was declining in size marking a reversal of the bearish sentiment on the indicator. 

Cosmos (ATOM)

Bitcoin Cash, Cosmos and VeChain Price Analysis: August 1

ATOM/USD, TradingView

ATOM displayed a considerable hike of almost 8% within a day. It alt was priced at $12.88 at press time. If it continued moving on the upside, the token might cross the immediate price ceiling of $12.96. 

If ATOM reaches the $12.96 mark over the upcoming trading sessions, it could expect strong resistance at $13.60. If the coin dips below its current price level, the support region lies at $12.00 and then eventually at $11.53. 

Overall technical outlook of ATOM remained quite bullish with the Relative Strength Index spotted above 60 despite a minor fall. Awesome Oscillator showed amplified green signals bars validating the same. 

Bollinger Bands widened suggesting chances of market volatility as prices kept touching the upper band. 

VeChain (VET)

Bitcoin Cash, Cosmos and VeChain Price Analysis: August 1

VET/USD, TradingView

VET had seen a period of consolidation a few days back, however, it rebounded from that and registered steady gains over the last few days. VET’s price at press time stood at $0.0913 as it recorded a 5.2% gain overnight. 

The technical analysis chart showed that VET witnessed a bullish trade, with the Relative Strength Index touching the overbought zone just 24 hours ago. At press time, however, the indicator fell below the overbought territory.

Chaikin Money Flow, over the last few days, registered increased capital inflows and was pictured in the bullish zone despite the minor fall in capital inflows at press time. 

Bollinger Bands opened up in anticipation of increased market volatility. With prices touching the upper band, the bulls might push the prices higher. The immediate resistance for VET lay at $0.93, failing to test that, the support region awaited at $0.0870 and then at $0.801.

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Source: https://ambcrypto.com/bitcoin-cash-cosmos-vechain-price-analysis-1-august

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