The report discusses the recent downturn in the NFT market, particularly for PFP projects. The author attributes this to a combination of factors including oversupply, a macro bear market, and low worldwide interest in NFTs. The report also highlights the role of ‘Ponzinomics’ in the NFT market, where most purchases are made with the intention of selling at a higher price later. The author also discusses the impact of external dependencies, where the value of an NFT is reliant on a person or team to maintain or increase its value.
- Understand the market dynamics: The NFT market is influenced by supply and demand. An oversupply of NFTs and low demand can lead to a market downturn.
- Consider the role of ‘Ponzinomics’: Many NFT purchases are made with the intention of selling at a higher price later. This can create a volatile market.
- Be aware of external dependencies: The value of an NFT can be reliant on a person or team to maintain or increase its value. This can introduce additional risk.