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Are NFTs a Bubble and Will the Market Crash

Read ahead as we discuss about the NFT wave that engulfed the digital world in the last couple years.
NFT a bubble
NFT a bubble

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The non-fungible token (NFT) market is huge. Its worth is estimated to be between $45 – $50 billion, and its popularity has risen in recent years.

Last March, Christie’s auction house sold a digital artwork titled “Everydays: The First 5,000 Days” by digital artist Beeple for an astronomical $69.4 million, giving the NFT market a huge boost. There have been more of these astronomically priced purchases.

This caused the NFTs market to explode, attracting the attention of a wide range of stakeholders, from large corporations to individual and institutional investors.

Many people are still perplexed by the NFT phenomenon. While some perceive NFTs as a bubble, comparing them to the 17th-century tulip mania, and discussing how long the NFT trend would persist, others believe NFTs are here to stay and see them as the next investment theme.

In this article, we will be understanding the discussion revolving around NFT bubble, what will happen in the coming years, factors influencing NFTs, Top NFTs, and how to invest in them.

NFT metaverse and gaming

Are NFTs a Bubble?

Bubbles aren’t always terrible and so are NFTs that don’t always result in a bubble. But the prices of some of the most publicized NFT collections are sure to face some negative volatility at some time, sooner or later.

Almost anything can be turned into a market by people. Though the speculative bubbles in items with no intrinsic worth are becoming more common.

NFTs have joined the ranks of Bitcoin and other meme-based cryptocurrencies like Dogecoin and Shiba Inu as instances of tokens with no intrinsic value that speculators acquire in the hopes that the price will continue to rise.

Even Dogecoin, which began as a comedy on these excesses and is now valued at $20 billion and pushed in Ponzi-like methods, is a satire on these excesses.

According to several studies, stock values can now be influenced by tweets or Facebook posts. Elon Musk’s tweets appear to have a significant effect on cryptocurrency pricing.

We appear to be in the midst of the most terrifying of all speculative bubbles. Asset creators such as NFTs will prosper.

The consequences of the NFT market crash will not be limited to the NFT market. Speculators may need to liquidate other assets as well, especially if they have taken on too much debt. This is expected to increase the volatility of all financial markets.

The wider the infection when the bubble breaks, the greater the bubble gets.

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Will the NFT Bubble Burst

Even though no new technology can avoid bubble building and harsh corrective phases, there are compelling grounds to believe that this will not happen with NFT on a significant scale anytime soon.

In the evolution of NFTs, innovation cycles appear to be exceptionally quick. There is so much innovation coming down the pipeline that the entire industry is at risk of entering a downhill phase ahead of schedule.

Other NFT artists are barely getting started, whereas simple graphics by crypto-savvy Noname artists have reached their pinnacle. As a result, generalizing the NFT ecosystem would be a mistake. Rather, the NFT industry can be divided into numerous sub-sectors, including Digital Art, Lifestyle and Brands, Gaming, Music, Phygital (physical and digital) Items, and so on.

NFT market collapse

Christie’s auction house sold a JPEG file created by the artist Beeple for $69.3 million in March 2021, setting a new record for digital artwork. The “original” JPEG, titled “Everyday: The First 5000 Days,” was secured using a non-fungible token, or NFT.

The transaction made news, and NFTs have subsequently become extremely popular. In 2021, investors spent $27 billion into the market, and Meta, Facebook’s renamed parent company, now aims to allow users to create and sell NFTs, according to reports. The only difficulty is that the NFT market will eventually fail, for a variety of reasons.

Changes in macroeconomic conditions may harm the value of alternative assets like NFTs and traditional artwork. The number of billionaires in the world has more than fivefold increase in the last two decades, resulting in a surge in available income to invest in alternative asset classes.

This trend has so far been reinforced by the COVID-19 pandemic. Much of the massive monetary stimulus injected by central banks poured into financial markets, enhancing the super-net rich’s worth even more.

But the investor interest might be fickle. Following the global financial crisis of 2008, sales of art and other luxury goods dropped by over 40%.

With central banks tightening monetary policy to combat inflation, new and untested asset classes are likely to be penalized more severely than more trustworthy ones. And the extremely volatile NFT market, which is based on digital currencies with no backing, is far from a haven.

NFT prices will eventually fall precipitously and permanently. For the time being, they are still high, and they may continue to rise for some time, but the fall will come. Those who believe they can time the market are entitled to try, but their optimism will almost certainly be unfounded.

NFT Trend setters

Social Media and NFT

Various industries are currently entering the market and investing billions of dollars to secure a spot in the digital creative economy. This explains why an NFT business recently received the largest fundraising round in European history.

Sorare, a French firm known for its digital soccer trading cards, raised $680 million at a $4.3 billion valuation. But some NFT businesses, such as Dapper Labs, which just raised $250 million in funding, are raising double- and triple-digit millions from well-known investors to help create the NFT economy’s infrastructure.

Sorare NFT

With this, it’s difficult to compare these NFT improvements to other crypto-related breakthroughs. Non-fungible tokens are the first blockchain application to appeal to the general public, not only the financial and digitally sophisticated. Most young individuals in affluent countries are anticipated to be exposed to NFT within the next 24 months.

Nothing has ever come close to the gamification and visualization of the supporting technology Blockchain through NFT, especially within social media. People are converted to crypto users using NFT who previously had no connection to cryptocurrencies, wallets, Dapps, and the like and consciously did not want to have.

Metaverse and Gaming

The gaming industry is currently making a significant contribution to the formation of NFT. Axie Infinity (AXS), for example, was able to reach a billion-dollar valuation in just a few months.

For example, in May of last year, the cryptocurrency AXS had a market value of roughly $8 million and a share price of around $0.12. AXS had a market capitalization of $5.6 billion in September of this year, with a price of over $92. $1,300 would have potentially been enough to become a crypto millionaire if properly invested.

Axie Infinity is a severe example, but other NFT projects have seen price increases of 100-fold or more. Games like Fortnite show that billion-dollar profits from gaming items (in-game items) are based on more than just short-term speculation.

Given the gaming industry’s rapid expansion, particularly in e-sports and virtual reality, it’s not unlikely that NFT will become the industry’s economic cornerstone. The gaming industry’s current market revenue of 155 billion US dollars (estimated for 2021 by Statista) is anticipated to be built to a large extent on the blockchain or token infrastructures in the future.

Celebrity Influencers

The growth of celebrity influencer Eminem’s massive payout has given credence to the assumption that these NFTs are valuable. But he isn’t the only celebrity who has helped bring the Bored Ape NFTs to the public’s attention.

Basketball players Shaquille O’Neal and Stephen Curry, millionaire Mark Cuban, electronic dance music DJ Steve Aoki, YouTuber Logan Paul, and late-night television show Jimmy Fallon are among those who have bought into the hype.

These well-known buyers essentially serve as a type of celebrity endorsement — a tried-and-true marketing strategy. It’s a vivid illustration of how media culture can fuel “irrational exuberance” in financial markets.

Traditional investments and sources of investment advice have become less popular. There is less interest in technical expert forecasts now that prices are separated from any future cash flows. People instead use social media and “conduct their investigation.”


What is the Long-term prognosis for NFT Market?

During the projected period of coming four-five years, the Non-Fungible Token (NFT) Market size is expected to grow due to increased consumer awareness. NFTs are blockchain-based cryptographic assets with unique identification numbers and metadata that distinguish them from one another. They can’t be exchanged or traded for equivalence.

The Non-Fungible Token (NFT) market share is expected to grow rapidly due to the rapidly advancing digital economy, rising consumer awareness of cryptocurrencies, blockchain technology, and the rising trend of owning true, original, and real possessions such as music audio, movie, video, lyrics, pictures, or portraits.

Three major areas which will be influencing the NFTs are:-

Music industry

The year 2021 will be remembered as a watershed moment for NFTs in the music industry. The majority of these were released as works of art and collectibles by well-known artists. As time went on, mainstream teams, labels, and creatives began to give more and more options.

This is because they too saw NFTs as having the ability to transform the entire sector. In the past, record companies exploited and mistreated performers. As a result, they only obtained a little portion of their labor and received nearly no royalties.

But many major companies in the music industry are starting to recognize the potential of NFTs. Because it is through them that artists may reclaim their power. Kings Of Leon and Grimes, for example, have both profited from NFTs.

Many new platforms and methods will develop in 2022 to assist artists in keeping ownership of their intellectual property. New approaches for rewarding the fan base, an important pillar of success, will also be introduced.


The Internet and the myriad global economies that have arisen from it have defined the first 20 years of the new millennium.

Gaming is a vital component of this ecology. Many players gain from this environment, including YouTubers, streamers, and professional gamers. As a result, they are pursuing careers that we could never have envisioned only a few decades ago.

A play-to-earn model for games has already been established thanks to the crypto ecosystem. Gamers will make money, contribute to communities, and own the time they spend in virtual settings in the next years. Gamers will be able to support themselves by playing their favorite games.


Whether you like it or not, Facebook’s redesign should send a strong message to everyone in the crypto community and beyond.

This is a strong indication from the mainstream that the metaverse is on its way. And the crypto ecosystem’s technologies, such as Web 3.0, NFTs, and Defi, are critical. They’ll make sure the many metaverse locales are both diverse and stable. They also place a strong emphasis on financial empowerment rather than shareholder exploitation.

These tools will be more improved in 2022. These technologies will give players financial freedom and lower entry barriers for people all over the world. In the same time, the blockchain technology that underpins it has progressed.

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How to invest in NFTs

NFTs as an investment which is at its peak stages right now and because most NFTs are placed on Ethereum blockchains, growth in the NFT area would benefit the second-largest cryptocurrency, Ether.

Along with Ethereum, NFT projects use a variety of cryptocurrencies. The top three NFT projects right now are CryptoPunks, Bored Ape Yacht Club (BAYC), and Axie Infinity.

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But before you start trading you have to be prepared for what the NFT world holds for you, how to buy NFTs from the best platforms, which is the best NFT to buy, guides to give you a strong investment and tactics to start with, and many more fundamental questions.

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Here are some real-life screenshots from displaying the current attractive prices and NFT deals.

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Top NFT Marketplaces

There are many NFT marketplaces to choose from once you’ve set up and funded your wallet. The following are the largest NFT marketplaces at the moment:

This peer-to-peer marketplace claims to sell “rare digital products and memorabilia.” To get started, simply create an account and browse the NFT collections. You may also sort pieces by how much they sold to find new artists.


Rarible is a democratic, open marketplace that lets artists and producers issue and sell NFTs, similar to OpenSea. The platform’s RARI tokens allow users to vote on features such as fees and community regulations.


To upload their work, artists must get “upvotes” or an invitation from other creators. Because of the community’s exclusivity and high admission cost. Artists must also acquire gas to mint NFTs to attract higher-quality work. Chris Torres, the developer of Nyan Cat, for example, sold the NFT on the Foundation platform.

It might also imply higher prices, which isn’t necessarily a negative thing for artists and collectors looking to profit if demand for NFTs stays the same or even rises over time.

Top celebs investing in NFTs

Justin Bieber

If you’re one of the millions of people who follow Justin Bieber on Instagram, you’ve seen his collection of NFTs, particularly inBetweeners; Bieber has expressed his fondness for the various colorful bear images.

Other celebrities, including Tom Holland and Snoop Dogg, have praised the recently released collection of 10,777 photographs created by artist Gianpiero, inBetweeners.


Eminem, an American rapper, songwriter, and record producer, raised $1.8 million in his first round of NFTs on Nifty Gateway last year. Digital action figurines, characters from Eminem’s videos, and original musical compositions were among the products sold.

Lionel Messi

Metaverse or Messiverse What would you choose? Lionel Messi, the best footballer in the world, hurled his NFT collection in August 2021.

“Man from the Future,” “Worth the Weight,” and “The King Piece,” all designed by artist BossLogic and depicting key moments from the footballer’s career, were included in the collection. The NFTs’ sales soared to US$3.4 million on the first day of release, demonstrating his celebrity.

Snoop Dogg

Snoop Dogg entered the NFT sector with a presentation of his “A Journey with the Dogg” collection. The album is expected to take listeners on a journey through the rapper’s life and fondest memories, complete with quotes and photos. It also includes an original track dubbed “NFT” as well as “Snoop Dogge Coins,” a Dogecoin-inspired cryptocurrency.

“I’ve seen the game develop over the years from analog to digital, and I’m always delighted when technology allows fans to connect with the creators,” the artist said of the launch.

In June 2022 it was announced Snoop Dogg would collab with Food Fighters Universe to open an NFT restaurant.

Paris Hilton

Paris Hilton, the queen of pop culture and entrepreneur, has launched Super Plastic, a vinyl toy and digital collectibles firm funded by Google Ventures and Justin Timberlake. Hilton’s Iconic Crypto Queen NFT was sold for $1.1 million in April 2021, and she now owns 141 pieces.

Summing up

Given the rate at which technological developments are occurring, it may only be a matter of time before we grow to enjoy digital art as much as we do physical art.

An NFT’s value can only be guessed on, but it, like any other asset, thrives on the number of people willing to invest or indulge.

While the NFT bubble may have burst, the market size is so small that it will not result in a catastrophic loss of wealth. It will have no direct or indirect influence on cryptocurrency investments. The entire possibility of NFTs is still in its infancy and is evolving.

Even though CryptoPunks and other collectibles are currently the most popular NFTs, more applications will emerge in the future. Land deeds and other significant papers can be transformed into NFTs and saved for perpetuity, which will benefit media companies such as OTT platforms and content creators. KoinEarth, a Bengaluru-based firm, is trying to transform invoices and other business papers into NFTs.

Exaggerated use cases will also be successful. On marketplaces like DecentralLand, virtual pieces of land packaged as NFTs can already be bought and traded.

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