Does the Fall of Cryptocurrencies (Already) Mark the End of NFTs? – TOM.travel

While several major voices in the economy are voicing their warnings against cryptocurrencies, many people are warning about NFT scams. At the same time, non-replaceable “works” and tokens lost more than half of their value. Do cryptocurrencies represent tomorrow’s economy? What if the NFT market disappeared as quickly as it appeared? Joint interview with Godefroy Jordan, president of Starting Dot and Guillaume Dejean, senior macro analyst at Western Union.

Last May, Christine Lagarde, president of the European Central Bank (ECB), described cryptocurrencies as: “highly speculative” and stated that she “were worth nothing”† In March, François Villeroy de Galhau, governor of the Banque de France, stated that cryptocurrency “is not a store of value, but rather a speculative asset”. “Bullshit”, “scam”, “worthless”, other terms have recently been used to describe the virtual currency market. For Guillaume Dejean, this economy, which has become very important today, is indeed the victim of numerous speculations. The real problem? Its value is not based on fundamentals: “There is not really a rational explanation for, for example, the price of Bitcoin. It is simply linked to a value of supply and demand. There is therefore a risk that you will lose a lot of money by wanting to invest if you do not know the sector”.

Optical effect and explosion of the bubble

As for the NFT market: “There is a big optical effect where we tend to bury NFTs with cryptos as they fall victim to the collapse of some virtual currencies that have depreciated. We need to decouple the price of NFTs into crypto value”, explains Godfrey Jordan. While many works have seen their value drop in just a few days, the art and NFT market had reason to wonder. According to him, the NFT market in the art sector represents no more than 300,000 collectors, which is nothing compared to the total number of classical art collectors around the world. In 2021, 80% of NFT buyers made acquisitions out of pure speculation: “It means that the market is ruled by speculators who apply inadequate marketing principles. In other words, it’s the wild west.” But for the president of Starting Dot, the bursting of this bubble is not so bad: “Now we can get to work and create something solid with established rules and jurisdiction. That is essential if we want to create a market that works in the long term.”

More regulation and disintermediation

The good news: The European Union has recently validated two new regulations with the creation of the MiCA crypto-assets regulation and the TFR money transfer regulation. “The fact that we are putting on a frame is good news for the market”, admits Guillaume Dejean. For Godefroy Jordan we should also have the opportunity to “jumping over the crypto barrier to acquire an NFT”, with the option to pay with your credit card, for example. A point that seems complicated, since the principle of NFT itself is based on payment in virtual currency and without intervention, ie without the intervention of banks. And that is perhaps the real crux of the problem. For Guillaume Dejean: “The fact is that central banks are pointing the finger at cryptocurrencies because they have no control over them… and they are working to create their own virtual currencies”† According to him, physical currencies will gradually disappear in favor of virtual currencies, which would question our entire global economic model.

An opportunity for artists to seduce a new audience

But for NFTs, the challenge will also involve creating real artistic content (or not): “The same conditions should be applied to NFTs as to the traditional art market”Godfrey Jordan explains. To date, he says, the promises have not been kept: “We will have to change the content of the NFT by perhaps making it more dynamic, more intelligent or turning it into a quality work of art. All this will build gradually over a decade or two, especially as we move towards mass use in the metaverse.” It is then essential to be able to acquire NFTs and democratize cryptocurrencies: “Speculators will leave the market to make way for players who are going to build something healthy. It is also an opportunity for the artists who will find a new audience there.” he concludes.

Opening photo: @shutter_speed

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