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Most NFT projects collapse once Bitcoin hits $ 100,000



NFT analyst Mateen Soudagar predicts that most non-fungible token (NFT) projects will suffer a setback and are likely to collapse if the price of Bitcoin and Ether soars to $ 100,000 and $ 10,000, respectively.


According to Soudagar, 60 to 75% of NFT projects in existence today are fraudulent. He also assumes that prices will fall if the prices for BTC and ETH fall.


“NFT projects where people were primarily for speculative reasons will be disappointed. And they may not recover. "


Soudagar believes the NFT industry will evolve into more "sophisticated games and virtual worlds," but "projects of little use will perish."


To the moon

After the approval of the first exchange-traded Bitcoin futures fund (ETF) in the US, Bitcoin climbed to a record high of $ 67,000 on October 20 . The benchmark cryptocurrency has more than doubled in value from its $ 30,000 low in late July.


As PlanB's S2F (stock-to-flow) forecasting model shows, analysts expect institutional engagement to drive the price up to $ 100,000 by the end of the year. The situation is similar with Ethereum , which also hit an all-time high of over $ 4,000 in the past few days and could soar to $ 10,000 in the fourth quarter. Meanwhile, the value of NFTs has skyrocketed recently, with trading volume exceeding $ 15.5 billion, according to DappRadar, compared to just a few thousand in 2017 when tokenized digital art buying and selling began.


The sector is dominated by the Opensea marketplace, which has reached a total volume of 9.5 billion US dollars, followed by Axie Infinity with 2.7 billion US dollars. Both platforms work on the Ethereum blockchain, as do most other marketplaces.


The stamina of the NFTs

In a Twitter thread, Soudagar drew parallels between the behavior of altcoins - basically any other digital asset that is not bitcoin - and that of NFTs. He notes that many NFT projects follow “the same sentiment” as altcoins - they drop sharply when Bitcoin rallies as money flows from the smaller coins into BTC.


“Just as altcoins suffer a setback when bitcoin or ether hit all-time highs, so will NFTs. The good alts should do well in the long term. Just like with non-fungible tokens. "


The investor has set up different scenarios for different holding periods. He assumes that what he calls “good projects” will have the stamina in the event of a drop in the price of non-fungible tokens.


“ NFT projects where the community/team is strong [and] growing can keep interested going. As well as super rare/iconic NFTs stand a high chance of weathering bearish waves and gaining growth. "



However, Soudagar does not bet everything on this scenario, but also talks about rising NFT prices during a market crash. Because at the beginning of this year we saw rising NFT prices fueled by the euphoria of the mainstream media

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