FOMO sentiment flooded into NFT, repeating the crash of animal currency?

On August 23, the payment giant Visa announced that it would spend $150,000 to buy the CryptoPunk#7610 avatar, which further promoted the NFT pandemic.

Within 24 hours of this news, CryptoPunks was under fire . A total of 200 buyers bought 288 pixel NFT avatars, with an average transaction price of $254,000. Many of them were sold for more than 200 ETH . On August 24, the “floor price” of CryptoPunks NFT came to 74.5 ETH, which more than doubled from 33 ETH at the beginning of the month.

Another item that is hotly hyped in the market is the “crazy stone” EtherRock. On August 23, EtherRock#27, one of the 100 “stone images”, was sold for 250 ETH, setting the highest transaction record for this series of NFTs. Not only that, various imitation disk projects modeled on EtherRock also appeared quickly. Paper NFTs and scissors NFTs with similar styles were released in the market, and they could also be sold at a price of about 2 ETH.

Under the tide of market hype, OpenSea ‘s transaction volume has repeatedly hit new highs. On August 23, OpenSea’s transaction volume reached 194 million U.S. dollars, a sharp increase of 55.2% from the previous day’s 125 million U.S. dollars.

It is worth noting that today’s NFT market has formed a complete set of hype routines. Due to the lack of depth in the NFT market and no short-selling mechanism, many experienced players have observed that there is often capital to scan for popular and rare NFTs and then sell them at higher prices. The demand for speculation is exceeding the demand for collections.

Despite this, the NFT boom is still higher than the wave, and the wealth effect has aroused more people’s interest. Many investors have developed Fomo (fear of missing out) emotions and try to chase the heat wave. The similar frenzy is reminiscent of the eve of the animal currency crash in the second quarter of this year.

When various types of NFTs repeatedly hit sky-high prices, some people in the industry believe that the price deviation caused by speculation makes NFT transactions like drums and flowers. If you choose to enter the market at this time, you may unfortunately receive the last shot.

Visa’s entry pushes up NFT hype

The NFT hype has swept the entire crypto asset circle. In the past few months, the prices of various NFTs have soared, constantly stimulating the senses of spectators.

On August 23, payment giant Visa announced its involvement in NFT business, pushing this wave to a high point. The entrance that Visa chose to enter the NFT is the recently popular CryptoPunks-a pixel avatar NFT series. Visa announced that it had purchased CryptoPunk#7610 last week for about $150,000. This is one of 10,000 24×24 pixel avatars, an ordinary female NFT avatar.

Cuy Sheffield, director of Visa’s encryption department, said that CryptoPunks pioneered the NFT technology and NFT commercial wave, so Visa hopes to have a Punk. More importantly, Sheffield believes that NFT will play an important role in the future of retail, social media, entertainment and commerce. “We want to empower buyers and sellers to help partners participate.”

According to the current market conditions of CryptoPunks, the price at which Visa buys Punk is considered “cheap”. Just after the company announced the purchase of CryptoPunk#7610, the price of a number of pixel avatars rose rapidly. According to the NFT statistics website Cryptoslam, on August 24, CryptoPunk#2426 was sold at a price of 275 ETH, which is approximately US$918,000. Punks numbered 5874, 8779, 7144, 1271, 7209 also sold more than 200 ETH on the same day. The price of the transaction.

FOMO sentiment flooded into NFT, repeating the crash of animal currency?

CryptoPunks successively sold high prices of more than 200ETH

As of 3pm on August 24, CryptoPunks had achieved a transaction volume of USD 73.2 million within 24 hours, an increase of 1330.6% compared to the previous 24 hours. A total of 200 buyers bought 288 avatars, with an average transaction price of 25.4 Ten thousand U.S. dollars.

According to data from the CryptoPunks official website, the Punk with the lowest price currently has a price tag of 74.5 ETH, which is approximately US$249,800. On August 2, Punk, with the lowest price tag, only sold 33 ETH.

Every pixel avatar NFT sells for a price of more than one million yuan at every turn, which is staggering, and this is just one of the crazy microcosms of the NFT market.

Recently, the most popular item in the NFT market is EtherRock. This is a set of NFT collections with the theme of “stones” launched in December 2017. It is limited to 100 pieces. The shape of each stone is exactly the same, but the color is slightly different. It is inspired by the classic Pet Rock toy popular at the end of 1975, and has no other purpose except being traded.

But the simple “JPG stone” has also been fired up. Earlier, Justin Sun, the founder of TRON, purchased EtherRock#87 at a price of 187 ETH. On August 23, EtherRock#27 was sold at a price of 250 ETH, setting the highest sales record among all NFTs in the series.

When NFTs on various themes were slammed, imitation discs came quickly. On the NFT trading platform OpenSea, referring to the rock NFT, some people issued a “paper” NFT, and some people subsequently issued a “scissors” NFT. The logic is that paper can wrap the rock and scissors can cut the paper. Even imitation disks have a big market, and their NFT is easily 2 ETH, which is about tens of thousands of yuan.

The price of NFT continues to skyrocket, which arouses spectators’ desire for speculation, and a large number of investors are involved in Fomo (fear of missing out) emotions. According to data from Dune Analytics, OpenSea’s transaction volume reached US$194 million on August 23, an increase of 55.2% from the previous day’s US$125 million. While the transaction volume exceeded US$100 million for three consecutive days, it has also continuously set new records.

Fanaticism rises with bubbles

Nowadays, almost no one in the encryption circle does not talk about NFT. Even Internet giants such as Tencent and Alibaba have deployed NFT business, attracting more attention from outsiders.

When the creation, issuance and free trading of NFTs form a mature process, the NFT hype routines are quietly popular.

On August 24, the NFT project Meebits was “sweeped”, and its transaction volume within 24 hours increased by nearly 500%, and the minimum price rose from 2.7 ETH to 3.5 ETH.

The Meebits project contains 20,000 unique 3D voxel figures, created according to a custom generation algorithm. It is the same product as Cryptopunks, and both are created and distributed by Larva Labs. When Cryptopunks was hyped up, some people were already eyeing Meebits.

FOMO sentiment flooded into NFT, repeating the crash of animal currency?

Meebits 3D Voxel Character NFT

When the NFT boom is surging, many investors have observed that in the freely traded NFT market, a potential force is manipulating the market, constantly raising the price of certain types of NFTs, and then selling them at high levels.

“It’s not just Cryptopunks and Meebits, but the recent hot Parallel Alpha has also been scavenged.” A senior NFT player told Honeycomb Finance that the price of the most common card NFT in Parallel Alpha has increased by 10 times from 0.02 ETH at the beginning of the month. The “floor price” has come to 0.2 ETH.

Parallel Alpha is a set of cards created around science fiction stories. Many cards are divided into common, rare, legendary and other levels. Often, the higher the level, the fewer cards issued, the rarer, and the higher the price. The above-mentioned senior players revealed that when a certain rare card is listed for sale at a certain price, some people will buy it in bulk and then sell it at a higher price, raising the market price. “This kind of capital is obviously for hype and profit, not really want to collect.”

Various NFTs have been sold at sky-high prices, which also shows that the hype upsurge of NFTs has gradually reached its peak. In various encryption communities, many people have expressed the idea of ​​buying at least one NFT. The wealth effect after the NFT speculation has attracted more and more people to join the speculation ranks, and the seemingly outrageous transaction prices have made investors accustomed to it.

This kind of scene is easily reminiscent of the explosion of various animal tokens in May this year. People chasing various popular NFT projects are just like people chasing animal currency hotspots at the time, hoping to get rich overnight. And when the mood is the most fanatical, it often indicates that the bubble has reached its peak. Animal coins collapsed after only two weeks of hype, and many tokens have now returned to zero.

According to Liu Changyong, a PhD in Economics at Peking University and a senior scholar in the blockchain field, some NFT works are now auctioned at sky-high prices, and there must be a bubble. On the one hand, hot money and speculative sentiment have shifted from DeFi to NFT; on the other hand, the NFT market lacks depth, and there is no short-selling mechanism. Speculative sentiment is high, and price manipulation for self-purchase and self-sale is very easy, and it may even become a money laundering tool.

Liu Changyong believes that the NFT market has just emerged, and the problems in the issuance, certification, management, valuation, and circulation of NFT assets have not been fully exposed. When the bear market comes and the market tends to calm down, these problems will gradually Appears, the bubble will burst quickly. However, he also said that innovation, bubbles, opportunities, and chaos coexist in the early stages of any new thing. You don’t need to stop eating because of choking and control the risks.

The frenetic atmosphere in the NFT market has already made some experienced players smell dangerous. Some people think that when the hype sentiment is higher than the real demand, NFT trading is like drumming and spreading flowers. When the price is speculated higher and higher, everyone is likely to receive the last shot.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/fomo-sentiment-flooded-into-nft-repeating-the-crash-of-animal-currency/
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