After the Terra Luna crash, NFTs might be next, says Morgan Stanley
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While Bitcoin and the crypto market continue to fall for the seventh week in a row, multinational investment bank Morgan Stanley warns investors that NFTs might be next to collapse after Terra. A historic crash took down the stablecoin Terra, and the token Luna went from almost $90 to a complete $0 within a few days.
Last week, the Wall Street giant reported that there wasn’t a correlation between the price drops of cryptocurrencies and the stock market. Instead, the bear market taking over cryptocurrencies was purely due to investor speculation and decreased demand.
Apart from the crypto market, NFTs and virtual real estate are also vulnerable to speculation from investors. Even the leading projects could collapse, similar to Terra and Luna, which were among the top cryptocurrencies.
According to a report from Chainalysis, NFT transactions slumped from $3.9 billion to nearly $1 billion from mid-February to mid-March. Projects like Moonbirds, Okay Bears, and BAYC’s Otherdeeds have generated large profits from sales in this period and held the market together.
After Luna’s recent crash, investors and experts in the industry believe that the market may be shifting from historical growth to a more mature market with declining sales.
“NFTs look to be entering perhaps one of many maturity stages. We expected this and believe it’s a normal development in such technology,” said Modesta Masoit, finance director at Dappradar.
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