Why NFT prices are plunging

What’s happening with NFTs right now?

The latest numbers show that investors and traders are getting out of NFTs… and putting their money in safer vehicles.

Over the past 30 days, the total market capitalization of NFTs has fallen 40% to $2.3 billion. Yes, that’s still a big number…larger than the market cap of JetBlue Airways (JBLU) or Tilray Brands (TLRY).

But the truly alarming statistic is the 25% increase in sales volume for NFTs.

Simply put, increasing trading volume along with falling prices means investors are selling their NFTs. That is why we see a large 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% drop since July. Bored Apes are some of the most popular NFTs in the entire market… so the fact that their prices are plummeting is a huge negative.

And again, these price reductions occur alongside increasing sales volume.

What is the cause of 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 (such as short-term bonds) more attractive to investors. The result is that money gets sucked out of riskier things (like stocks, cryptocurrencies and NFTs).

And the Fed plans to continue raising interest rates to above 4% by the end of the year. As long as interest rates rise, we can expect NFT prices to continue to fall.

Why I am waiting to buy NFT

Currently I am not buying any NFTs. I plan to wait until it is 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.

When that happens, I’ll focus on the top 25 NFT collections…and look for those where the floor price is down 65% or more from their peak.

For example, I want to own a piece in the Otherdeed for Otherside collection. Currently, the floor price is about 53% below the all-time high. I start bidding when it’s at least 65% below the all time high…and I plan to hold on for the long term. (I’ll wait a little longer if rates fall this month…before we see any signs of the Fed easing its rate hikes.)

I’ll let you know how I feel.

BlackRock continues its work with crypto

The world’s best investment manager is entering the crypto space…

In the investment world, no one is as big as BlackRock. The company manages $9.5 trillion in investment assets.

During the most recent quarter, BlackRock reported $90 billion in total net inflows. In other words, investors are pouring huge 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 clients.

Two new ETFs point to major growth trends

Two weeks ago, BlackRock launched a new exchange-traded fund (ETF) with a focus on blockchain technology: the iShares Blockchain Technology UCITS ETF.

Briefly, this fund owns a basket of 50 stocks linked to blockchain-related growth trends. About 70% of the holdings are directly involved in blockchain activity (such as exchanges, miners, and a number of software companies that support the blockchain ecosystem). The rest of the holdings include technical hardware companies, financial firms and a few communications companies.

The fund’s largest holdings 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 a new fund — the iShares Future Metaverse Tech and Communications ETF — that 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.

Simply put, these funds will make it easier for retail investors to invest in crypto-related industries through their traditional brokerage.

As I’ve mentioned before, rising interest rates from the Fed will cause volatility in the markets for all risky assets, including crypto and NFTs. As inflation starts to fall, we will likely see a ton of money flowing into investments related to blockchain and the metaverse.

BlackRock doesn’t make these ETFs for the heck of it. Remember, this is the largest asset manager in the world. It employs thousands of smart analysts to ensure it stays on top of the most promising long-term trends.

These new ETFs prove that BlackRock is serious about blockchain and the metaverse. And it’s not alone… Rival firms such as Goldman Sachs and Morgan Stanley are also predicting big futures for these trends. (By the way, Frank has made it incredibly easy to access the metaverse… Here’s how.)

Although the short-term environment looks tough… all signs point to great, long-term growth opportunities for investors.

Do you have questions about digital assets? Let me know here.

PS Frank believes the overall market is about to dive even further…

So tomorrow, October 11, at 8:00 p.m., he’s holding an emergency briefing to explain how to make a fortune like it does…

And use the surplus to buy during the eventual recovery.

In addition, he will answer your questions LIVE. Reserve your place here.