The latest numbers show investors and traders are getting out of NFTs… and putting their money into safer vehicles.
Over the past 30 days, the total market cap for NFTs has dropped 40% to $2.3 billion. Yes, It’s still a huge number… larger than the market cap of JetBlue Airways (JBLU) or Tilray Brands (TLRY).
But the really alarming statistic is the 25% increase in sales volume of NFTs.
Put simply, rising trade volume along with falling prices means investors are selling their NFTs. That’s why we’re seeing a big decline in the overall market value.
An even more shocking sign: The floor price for the popular Bored Ape Yacht Club collection has dropped from over $130,000 to just under $101,000—a 22% decline since July. Bored Apes are some of the most popular NFTs in the entire market… so the fact that their prices are plunging is a big negative.
And again, these price declines are happening alongside rising sales volumes.
What’s causing the carnage?
As I’ve mentioned in previous articles, the technology behind NFTs is revolutionary… but the long-term potential doesn’t matter right now…
Prices for all risky assets are under pressure as the Federal Reserve raises interest rates.
Higher interest rates make safe investments (like short-term bonds) more attractive to investors. The result is that money is getting sucked out of riskier stuff (like stocks, cryptocurrencies, and NFTs).
And the Fed plans to keep raising interest rates to over 4% by the end of the year. As long as interest rates are rising, we can expect NFT prices to keep sinking.
Why I’m holding off on buying any NFT
For now, I’m not buying any NFTs. I plan to wait until it’s clear inflation is coming down. At that point, we can expect interest rates to stop rising… which will remove the main headwind for the market.
Once that happens, I’ll be focusing on the top 25 NFT collections… and looking for ones where the floor price is down 65% or more from their all time high.
For example, I’d like to own a piece in the Otherdeed for Otherside collection. Currently, the floor price is about 53% below its all time high. I’ll start bidding once it’s at least 65% below the all time high… and I plan to hold for the long term. (I’ll wait a bit longer if prices plunge this month… before we see any signs of the Fed easing its interest rate hikes.)
I’ll let you know how I make out.
The world’s top investment manager is making its way into the crypto space…
In the world of investing, no one is as big as BlackRock. The company handles a mind-boggling $9.5 trillion in investment assets.
During its most recent quarter, BlackRock reported $90 billion in total net inflows. In other words, investors are pouring massive amounts of money into the company’s platforms… even in the middle of a bear market.
Just last month, BlackRock partnered with crypto exchange Coinbase to expand access to Bitcoin and other cryptocurrencies for its institutional customers.
Two new ETFs point to major growth trends
Two weeks ago, BlackRock launched a new exchange-traded fund (ETF) focused on blockchain technology: the iShares Blockchain Technology UCITS ETF.
In short, this fund owns a basket of 50 stocks connected to blockchain-related growth trends. About 70% of the holdings are directly involved in blockchain activity (like exchanges, miners, and a variety of software businesses that support the blockchain ecosystem). The rest of the holdings include tech hardware companies, financial firms, and a few communication companies.
The fund’s biggest positions include Coinbase (13.6%), fintech firm Block (11.5%), and Bitcoin miners Marathon Digital (11.8%) and Riot Blockchain (9.7%).
According to a recent SEC filing, BlackRock plans to launch another new fund—the iShares Future Metaverse Tech and Communications ETF—which will focus on companies involved in virtual platforms, augmented reality (AR), gaming, social media, and more.
The takeaway
BlackRock’s new ETFs are the latest example of Wall Street firms embracing crypto.
Put simply, these funds will make it easier for retail investors to invest in crypto-related industries through their traditional brokerage.
As I’ve mentioned earlier, rising interest rates from the Fed will cause volatility in the markets for all risky assets, including crypto and NFTs. Once inflation starts to fall, we’ll likely see a ton of money pour into investments related to blockchain and the metaverse.
BlackRock isn’t creating these ETFs for the heck of it. Remember, this is the biggest asset manager in the world. It employs thousands of smart analysts to make sure it stays on top of the most promising long-term trends.
These new ETFs prove that BlackRock is serious about the blockchain and the metaverse. And it’s not alone… Rival firms like Goldman Sachs and Morgan Stanley are also predicting big futures for these trends. (By the way, Frank’s made it incredibly easy to get access to the metaverse… Here’s how.)
While the short-term environment looks tough… all signs point to big, long-term growth opportunities for investors.
Got a question about digital assets? Let me know here.
P.S. Frank believes the overall market is about to nosedive even further…
So tomorrow, October 11, at 8 p.m., he’s holding an emergency briefing to explain how to make a fortune as it does…
And use the profits to buy during the eventual recovery.
Plus, he’ll be answering your questions LIVE. Reserve your spot here.
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