"The NFT thingy is starting to burst," Nassim Nicholas Taleb, the author of the 2010 New York Times bestseller The Black Swan, warned investors. "All you need is higher interest rates for things that make no sense to start making no sense." The euphoria over new technology is waning and it affects demand.
Notably, the author of a popular book, who predicted the financial crisis of 2007-2008, analyzed the recent history of Twitter co-founder Jack Dorsey. He sold his first tweet as an NFT last year for nearly $3 million. It is now worth only thousands, which is much lower.
The tweet's buyer was crypto entrepreneur Sina Estavi. He announced that he would be selling the NFT on OpenSea and would donate 50% of the revenue to charity.
Taleb and some analysts believe that the era of ultra-low interest rates and cheap money is coming to an end. For this reason, a great chunk of this easy money has poured into speculative investments such as NFTs. Yet, such activity is likely to end soon. In 2021, people spent $44 billion buying and selling NFTs. Given the current circumstances, something similar is unlikely to occur.
Taleb's theory about the black swans is associated with the emergence of extremely rare events for which the market is completely unprepared. In 2007, such an event was falling home prices. In 2019, the coronavirus pandemic took place. The 2020s is the end of low rates and easy money.
C.Z. Zaho, the billionaire founder of Binance, the world's largest cryptocurrency trading platform, also expressed his opinion on NFTs. He believes that when using innovations, people are getting crazy. The reason for such statements was a frenzy about NFT projects. Responding to the 2021 sale of an NFT piece of artwork for $69 million, he said "People have lost their mind."
The founding father of the innovation was artist Mike Winkelmann, who worked under the pseudonym Beeple. Despite the growing popularity of NFTs, he expressed concern that this sector was sliding into a bubble.
NFT is a unique digital asset that belongs only to its owner(s) and is a kind of certificate of authenticity for works of art, music, videos, or tweets.
NFT can be sold individually or as part of a collection, e.g. Bored Ape Yacht Club collection, consisting of thousands of digital illustrations of monkeys created on the Ethereum blockchain network.
