They were initially advertised as a digital money, but the asset’s volatility caused its supporters to abandon the notion.
They attempted to rationalise it by calling it digital gold, but it was not the secure haven they envisioned.
Then it was marketed as an inflation hedge, but the idea was debunked.
Now that the equity markets are tumbling, crypto fans are blaming the decline on the global tech stock crash.
Cryptocurrencies, which were introduced with great fanfare and have had the highest growth in terms of capital raising, are running out of reasons to exist.
Bitcoin, the cryptocurrency’s poster child, fell below $30,000 for the first time since July 2021, a near 50% decrease from its November 2021 peak. Comparatively, the Dow Jones has plummeted just 13% from its 2021 highs.
Ether, Solana, and Avalanche, Ether’s cousins, have also suffered. But the biggest blows were saved for NFTs. Blue-chip NFT collections like Bored Ape Yacht Club (BAYC) have lost 29% in the last week.
The JPG NFT Index, which measures NFTs, plummeted almost 26% last week.
The loss may have been dismissed as a normal occurrence in unpredictable financial markets, but a catastrophe is brewing. Just to make matters worse, some US banks are now offering loans secured by digital artwork.
According to reports, part of the US NFT sell-off is due to NFT-backed loans selling collateral to meet loan commitments.
Coinbase’s quarterly earnings were below market expectations due to a roughly 20% reduction in trading volume.
With countries increasing controls on cryptocurrency, the future does not seem promising for them…
