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Is NFT Good Investment? The Reasons Why Experts Are Skeptical About The NFT Market

A non-fungible token (NFT) is the only digital asset, like artwork and sports collectibles, that is verified and stored using blockchain technology, which exploded in popularity during 2021.

Source: PD Legal

People create, collect, and trade NFTs that worth millions of dollars, hoping to reap many times more profits in the future. However, experts still doubt whether NFT is a good investment.
Though the increase in NFTs is still fairly new, a large amount of money has already been exchanged between collectors.
For example, since 2017, NFT collections have generated more than $6.2 billion in sales while digital artworks have generated more than $1.9 billion, according to NonFungible – NFTs’ sales history tracking unit.

Jon McCormack’s viewpoint

Source: CNBC

"Artwork and collectibles have become large NFT items because they fit NFT’s nature," said Jon McCormack, a professor of computer science at Monash University.
McCormack shared, "Digital is copiable, and having this extra credential is really important to show ownership over particular things."
But researchers are also concerned that this might not be a good time to enter this market, as it has grown too large and quickly under excessive hype and speculation.
For instance, according to analysis by Dappradar, a company that helps people track NFTs and other decentralized assets, NFT trading volume has increased by 38,000% year-on-year to reach $10.7 billion.

What Michael Every and Evan Cohen think

Source: Forbes


"This may be the peak in the paradigm of everything bubbles," said Michael Every, head of financial markets research for Asia Pacific at Rabobank. "It worries me intensely, even when I have a good understanding of the motivations behind young people in particular."
Experts now advise users to buy NFT if they want to own it, not because of the desire to invest to resell because of the FOMO (fear of missing out) mentality.
"Don't buy it just because it's NFT," says Evan Cohen, co-founder of Vincent. "Buy it because you like the art or buy it because you think the collection is interesting or the community is interesting. You want to participate because of the content, not the underlying technology that powers this."
H/T: cnbc.com
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