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This could destroy the entire Crypto Market


Breaking news this is exactly the 2008 housing crises except it's happening in our own metaverse. It's really sucks for the people who are going to lose money but when everything comes crashing down , it's also when the best buying opportunities are.

When the stock market crashes, all the small low market gap risky stock and conpanies are the first to get wiped out. In recession people don't want to be as risky with their money. So they move it from risky companies to more established ones. Well in the jpeg world, all the smaller nft projects have been pretty much wiped out completely already. I know you're thinking there's no way projects like Dink Doink NFT could ever possibly crash, surely trusted world renowned rapper 69 wouldn't pitch us a project that would go down in price. I'm sorry to be the bearer of the bed but I feel like we all knew those money grab projects were bound to crash there's no suprise.


But what about the jpegs that were worth mid 6 figures a pop project like the board ape club the most established names in the whole crypto space , surely those aren't going to crash a bad. Well that' might be true but maybe not for long. They are not down 99 like most projects. At the very peak earlier in April the floor price for these monkey pictures was 153 ethereum , today the floor price is 71 ethereum which trolls aside around a 50 drop.

I was kind of surprised it managed to hold up the way for reference shopify stock is down 70 for the year and that's massive legitimate company. But these gorilla snapshots only dropping in 50 % is suspiciously impressive . Upon deeper analysis , I realized that the numbers were slightly they're not measured in dollars , they measured in ethereum which also dropped so that's not really fair comparison when you measure it in dollars the floor price of an NFT project worth 500k was 130k today.

All the negativity towards this might get worse. People been taking out loans against their NFTs using these jpegs as collateral for loans. They would lock their bored ape nft into arcades protocol then they would give me a loan of usd coin against it. I could then convert that usd coin into American Dollars to help you pay down payment of my loan. It will hold on my nft until I was able to repay the loan. But this doesn't work with many people, there's a small window to this . A Ton of people using these lending services taking out loans against something as volatile as an nft won't end well. These loans services like BendDAO operate like if you bought a hypothetical dog picture that's 100 ethereum each I can get 30 to 40 percent at the floor value as low as so in this scenario , You give the lending platform your internet dog picture that's 100 each and in return they lend you 30 to 40 each about 15 to 25 intrest rates. If the floor value of your picture drops the platform liquidate it they'll have to sell it auction if off in order to recoup some of the money that they lent you.


Right now , a lot of NFTs are hanging on the thread waiting to be on auctions and people do not want to pay a bunch of money for these apes. The price could spiraling down and they could really form this NFT death spiral.

 

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WendyZaca
WendyZaca

IT Service Consultant who is interested in Crypto, NFTs and Foreign Exchange.


Crypto, NFTs and Foreign Exchange
Crypto, NFTs and Foreign Exchange

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