The crypto space is volatile and exciting, an arena that requires investors to take a step back and look at the big picture much more often than some other investment markets. This won’t surprise crypto enthusiasts; it’s what makes the market so attractive in the first place. Fortunes are made and reinvested, trends shift, and new developments spring up suddenly, seemingly month-to-month instead of year-to-year. If you’re not tracking the Bitcoin, Ethereum, or Solana price on the regular, you’ve probably missed a few books worth of drama this year already. Then there’s NFTs, and that’s a whole other thing, too.
Bitcoin is Changing: For the Better, or Just the Bigger?
“There have been developments,” would be an understatement. To cut to the chase, institutional adoption has become a driving power in a big way. For example, Hong Kong’s largest online broker has launched Bitcoin trading, and that has caused a significant shift in a South Asian market that was already more eager than usual. Moreover, it’s a sign that institutional investment has shown signs of growing momentum. You should take the time to understand the differences between retail and institutional investment so you can draw your own conclusions.
Setting that aside, it’s been kind of a year for Bitcoin specifically, and the rest of the crypto space in general. The world’s most prominent cryptocurrency has been in a volatile mood, with regulatory changes causing spikes that triggered sales that triggered buys, but this is the high-energy vibe that crypto investors love. Bitcoin’s gotten big enough and active enough that governments have been singling it out for new policies again, for better or worse.
NFTs Are Doing What They Do, Which Means… What?
For a while, it seemed that NFTs were the new old hype that was coming back for another spark that just might last this time, but certain NFT-watchers over at Forbes think the bubble might be getting a bit big for its own good again. According to them, there’s been a decrease in market activity, though sources indicate that major sales are still happening for the best NFTs.
If NFTs are declining, it’s probably not from an overproduction of randomized social media user images this time. Could it be that, while Bitcoin and other cryptocurrencies are finding new ways to generate interest, NFTs are struggling to do the same?
Is this a Shift, or is This Where Things Were Always Headed?
Retail traders were a driving force in the early days of both Bitcoin and NFTs, which is something that has begun to change for one out of the two. Retail traders are still a strong force in the larger cryptocurrency environment and certainly have their role to play in Bitcoin, but the growing power of institutional investment is changing the story. It’s been keeping crypto on top of the conversation, infusing it with new and different energy, and keeping enthusiasts excited about unpredictable possibilities.
NFTs don’t seem to have that same energy right now. It’s unclear whether they’ll find the same popularity as Bitcoin. NFTs seem to be falling out of the conversation again, and it’s hard to say what kind might bring them back in.
This creates an interesting contrast. Cryptocurrencies have always been closely tied to NFTs, and in the overarching blockchain ecosystem, the success of one tends to be a boon to the other. From here, experts and enthusiasts can try to make predictions about what comes next, but this article won’t venture to guess.
This article appears in Aug 22-28, 2024.