The Non-Fungible Tokens (NFTs) have come a long way from the time when only celebrities used to create and sell for millions. But today NFTs have become a mode of the thing of their own.
These NFTs can offer anything from GIFs, and digital art to static images. It’s just a matter of time before the NFTs will turn into the real thing other than just discussion.
Today Bitcoin has dropped 40% since April and it’s just not due to equity markets, according to the research reports by Morgan Stanley published on May 12th, 2022.
According to an analyst led by Sheena Shah, decentralized finance (Defi) and crypto-backed stablecoins, which are the most hyped and leveraged area of crypto, are all traded on speculation along with the limited real user demand.
The one that is been the most speculative and inflow is the Non-fungible tokens (NFTs) and digital land. The reason behind people using these assets is based on the expectations that the next buyer would buy them for a higher price.
On the other hand, after the Terra blockchain’s stablecoin UST de-pegging, the banknotes being traded by crypto markets have also collapsed.
The stablecoins have become one of the important parts of the leverage built within the Defi ecosystem. However, the recent de-pegging event led to increased uncertainty and instability.
As the interest rates are being hiked due to US inflation, these stablecoins, are the most speculative and leveraged area of cryptocurrency.
The recent reports of Morgan Stanley, its clients are worried that the large fall in the crypto prices and de-pegging of stablecoins will act as a more systematic risk for broader financial markets.