According to the guy who was one of the few to predict the 2007-2008 financial crisis in a book regarded as one of the most important since World War II, the NFT bubble is about to explode.
Nassim Nicholas Taleb, author of the New York Times best seller The Black Swan, tweeted Saturday, “The NFT stuff is starting to explode.” “All it takes is a rise in interest rates for things that don’t make sense to stop making sense.”
Taleb used the example of Twitter co-founder Jack Dorsey, whose first tweet sold for roughly $3 million as an NFT last year. According to a CNBC feature released this week, it’s now only worth a few thousand dollars.
Last Wednesday, the tweet’s buyer, crypto entrepreneur Sina Estavi, stated that he would be selling the NFT on OpeanSea and donating half of the revenues to charity, according to CNBC. The highest offer was slightly over $18,000 as of Saturday.
The appearance of ultra-rare occurrences for which the market is unprepared is the subject of Taleb’s black swan hypothesis. It was plummeting property prices in 2007, and it will be the end of cheap rates and easy money in the 2020s. In other words, the swans may not always be white.
In May, the Federal Reserve is likely to raise interest rates by half a percentage point as part of a stepped-up attempt to reduce inflation. Last month, consumer prices in the United States increased by over 9% year over year, the highest increase since 1981.
The market has been anticipating the end of the ultralow interest rates and cheap money that have characterised market monetary policy for some time. Taleb appears to be saying that most of the cheap money has gone into speculative ventures like NFTs, and that this trend is ending.
In a recent interview with Fortune, C.Z. Zaho, the billionaire founder of Binance, the world’s largest cryptocurrency trading platform, echoed an opinion similar to Taleb’s, saying, “People have lost their minds,” in response to the $69 million sale of an NFT piece of artwork in 2021.
To read our blog on “A major security problem discovered in another top NFT marketplace,” click here.
