The crypto world is crashing, or so some say, and not without some schadenfreude as they point towards two recent dramatic dips in the charts — namely, for NFTs and Bitcoin. This has prompted the crypto-critical to decry not only on NFTs as a ‘scam’ but to point fingers at the crypto market as a whole. But it’s not an attitude subscribed to by those in the know. Crypto exchange StormGain, a popular mobile and web platform for buying, selling and holding cryptocurrency, has counselled the crypto-curious to keep it classic and focus on a silver lining for crypto coins.
At the time of writing in the second week of June, weekly NFT sales total up to a sobering $9.5 million. The beginning of May saw the NFT market reach a peak, with $102 million worth of Non-Fungible Tokens sold on 3 May. It seemed like everyone was rushing to turn any piece of internet ephemera — from memes to clips to posts — into NFT ‘art’ and make bank. Fast forward to the last week of May, and we’re looking at a different story. According to Nonfungible.com, only $19.4 million in NFT sales was processed, a 90% drop compared to the $170 million in NFTs transacted the week of the peak. The downward trend is continuing in June, although not quite as dramatically.
The NFT crash is an event that coincided with a big drop in Bitcoin’s value. The original cryptocurrency has been trapped in a bear market since mid-May and currently stands at $36,000. For better or worse, BTC usually stands in as the barometer for public confidence in crypto as a whole. Despite BTC taking a hit, altcoins — which is basically every other cryptocurrency, from the well-known such as Ethereum and Ripple to new market darlings such as Dogecoin, Cardano and Pancakeswap — have been thriving in crypto exchanges in recent weeks. Bitcoin’s price remains high even during the dip (remember BTC for $6,000 in March 2020?), and the coin is lightyears ahead of where it was during the 2010s. By contrast, while NFTs themselves aren’t completely brand-new, the bubble that grew during their time in the public consciousness only lasted around four months, which is hardly comparable. In short, while would-be crypto art collectors might be clenching their teeth right now, cryptocurrency traders have nothing to fear. In fact, it’s a time of opportunity.
“What we’re seeing is not so much a crisis of confidence but more a correction that will turn out to be healthy in the crypto space,” said StormGain CEO Alex Althausen. “Cryptocurrency is growing, evolving and becoming more profitable than ever, and this can lead to these inflated hype cycles, opportunism, sure. But in the long term, holding and trading digital assets remains a fantastic way to build wealth. The key is seeing crypto as a wider ecosystem: you invest broadly, you have a resilient portfolio, and you don’t get dragged along by rises and dips. You make them work for you. That’s why we’ve been focused on expanding two big things: a range of assets so that clients can really diversify and the in-depth knowledge base that helps people understand crypto market behaviour”.
The CEO went on to describe a key distinction between actual cryptocurrencies and NFTs. The digital instruments on StormGain all have actual real-world technological applications and are not subject to the fickle tastemakers of the art and collectables market. As blockchain adoption increasingly becomes the norm in the finance world, cryptocurrency isn’t going away. While NFTs resemble trading cards, Bitcoin and other cryptocurrencies are more like oil, stocks or gold; they play a much more important role in the economy.
Just like with stocks and gold, market trading is a game of short-term tactics and long-term strategies. That also holds true for digital gold: to play the long game, it helps to know the nature of the market as thoroughly as possible. To that end, we invite you to research thoroughly and remember to build a diverse portfolio for trading! StormGain’s educational resources are packed with information for beginners and experts alike and are a great place to start. For anyone who is curious to try the trading app in action, the platform also offers a wide range of assets, including crypto indices for risk management. You can try StormGain’s free demo account and practise trading in real market conditions to test its training materials for yourself.
The current cryptocurrency dip provides a great opportunity to buy and build wealth in the long term. As for NFT art, well, who can really put a price on beauty?