Here’s An Unlikely Bright Spot In All The Crypto Melee

Here’s An Unlikely Bright Spot In All The Crypto Melee
Jonathan Hobbs

over 1 year ago1 min

The second quarter wasn’t pretty for much of the crypto market. But here’s a bright spot: the total market value of Ethereum’s top 100 NFT (non-fungible token) projects – when priced in ether – surprisingly ticked higher.

This chart shows the total market value over the past 10 months. You can see it peaked in April, then slumped in May, before bouncing back in June. This all happened while the price of ether was under pressure – dropping about 67% over the second quarter.

It’s interesting: with ether’s price sliding, you’d expect those riskier NFTs to fall even more – after all, that’s what happened with the more volatile altcoins. But there’s something else at play here. See, most NFTs are built on Ethereum and are priced in ether, which means you first have to acquire ether with traditional currencies like the US dollar, if you want to buy one. And right now, ether is cheaper in US dollar terms, which could be driving increased demand for Ethereum NFTs – the idea here being to buy NFTs and sell them when ether’s price goes back up.

NFTs are still a risky bet, mind you. And Ethereum’s top NFT 100 collections don’t sell for cheap. But what this recent quarter shows you is that their values typically don’t fall – or rise – in lockstep with ether (or, by extension, with the rest of the crypto market). And that suggests that NFTs might even offer some diversification benefits for your crypto portfolio. But if you’re going to dabble in NFTs, make sure you have a good understanding of how to value them first.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG