BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
FOLLOW
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result

Crypto vs NFTs: In a Recession?

BlockNews Team by BlockNews Team
August 26, 2022
in Crypto, Investing, NFT, Opinion
Crypto-Graph-1
Share on TwitterShare on Reddit

A generalization that is often made is the similarity of price action between NFTs and Cryptocurrencies. It
is slightly more intricate than people may think. With an economic recession up in the air for 2023 from
economists, differentiating the two markets can help give people insight and confidence in their
investment decisions.

Differences

A key difference is the trading volume. In 2021 Crypto trading volume was over $14 trillion whilst NFTs in
their breakthrough year only accumulated around $25 billion. This shows the massive difference in
liquidity. However, this does not directly correlate to the volatility of the NFTs. This is due to the supply of
NFTs as well as the basis for their demand for them.

NFTs’ value is created by the demand for the good in the same way as art, collectables and similar,
because of the digital ownership status that users receive when purchasing them. This is different to
Crypto where the main reason for investors buying is the belief that Cryptocurrency will be superior to
current FIAT currencies and so the money will flow to their investment and make a profit that way.

In addition, the NFT market is much more secluded with most projects only allowing seats of around
10,000 in the biggest collections. People cannot own part of an NFT pushing out smaller retail investors
to Crypto where they can own a portion of a coin. This makes it so that a lot of the money stays
circulating the same money so less money leaks out of the space and makes new money entering
harder unless there is great demand. Also means there is less trading volume. We can see how this
plays on the price of NFTs where their ETH value stays stable even though the FIAT value may fluctuate
a lot. Holders are holding for the long-term and see the NFT at ETH value instead of following the FIAT
value.

Performance

There has been speculation that Cryptocurrencies will be a good hedge against the damage a recession
causes to purchasing power as well as other assets’ values. However, at the current state, where Crypto
is still mainly being used as a store of value, it may not be an effective hedge. The biggest value it brings
is transacting money without barriers of banking and government which is only being done on a small
scale i.e. citizens of corrupt governments and war/crisis relief. Until it can bring more utilization than a
store of value which is where big money is currently sitting, then we can expect prices to reflect the other
markets, if not more dramatically with the lower liquidity.

As for NFTs, the ETH/Crypto value of NFTs is likely to remain relatively stable whilst the FIAT value will
likely be volatile following the Crypto prices. Due to the big projects being owned and traded by a
secluded group of enthusiasts that tend to have a more long-term approach to their NFT purchases,
unnerved by the FIAT value and more concerned with the Crypto value.

Tags: BlockchaincryptoNFTNFTsWeb3
Tweet1ShareShare1

DON'T MISS THESE! HOT OFF THE PRESS

Nasdaq Billboard in times square
Crypto

SEC Extends Deadline for ARK 21Shares Spot Bitcoin ETF Decision to January

September 28, 2023
HTX Logo
Business

HTX Records $7.9 Million Loss, Implores Hackers to Return Stolen Funds

September 28, 2023
Eth Logo overlooking Earth
Business

Celo Considers Transition to Ethereum Layer 2 Via Polygon Chain

September 28, 2023
Kucoin Logo with Digital Background
Business

KuCoin Crypto Exchange Breaks 30M Users as the Exchange Celebrates its 6th Anniversary

September 28, 2023
Binance Logo with Red Market Charts
Business

Binance Fully Exits Russia, Sells Business to CommEX

September 28, 2023
Bitcoin Ordinals Text with some NFTs on top
Crypto

Bitcoin Ordinals Visionary Proposes Fresh Token Protocol as BRC-20 Alternative

September 28, 2023
Load More
Next Post
pay-to-earn with crypto

On Undervalued Crypto Concepts: Why Move-to-Earn Should be Mainstream

AVAX-Logo

Smart Contract Coins & their Blockchains: Avalanche

Real Estate at Night

How will Real Estate Evolve with NFTs?

Related News

adidas x Fewocious

Unveiling the Phygital Frontier: Adidas Originals x FEWOCiOUS Partnership

June 14, 2023
RTFKT-Nike-Logo

Everything You May Have Missed About RTFKT Studios Merger with Nike

October 9, 2022
Cardano-Logo

Everything You Need to Know about the Cardano Hard Fork

August 29, 2022

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Featured
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
Discord Twitter Instagram TikTok
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Featured
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • SEC Extends Deadline for ARK 21Shares Spot Bitcoin ETF Decision to January September 28, 2023
  • HTX Records $7.9 Million Loss, Implores Hackers to Return Stolen Funds September 28, 2023
  • Celo Considers Transition to Ethereum Layer 2 Via Polygon Chain September 28, 2023

© 2022-2023 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022-2023 BlockNews.com - Crypto and NFT news website by JRNY Club.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?