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Avoid the NFT trap in the upcoming bull cycle, expert warns 

Avoid the NFT trap in the upcoming bull cycle, expert warns 

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TL;DR

  • Anders Helseth from K33 Research advises caution with NFT investments in the upcoming bull cycle, predicting a different trend compared to past cycles.
  • Historical patterns show Bitcoin leading initial surges in bull markets, but Helseth forecasts a quick fizzling of NFT momentum this time.
  • Despite potential short-lived surges in NFT wash-trading, the overall allure and value of NFTs are expected to decline, with Helseth urging investors to be wary.

Investors eagerly anticipate the next bull market in the crypto market, but caution is advised, particularly regarding non-fungible tokens (NFTs). Anders Helseth, the head of research at K33 Research, has recently warned against investing in NFTs in the approaching bull cycle, citing historical patterns and market dynamics.

Historically, Bitcoin (BTC) has been a dominant force in the cryptocurrency market, with its price movements significantly influencing the rest of the market. In previous bull cycles, Bitcoin typically led the initial charge, followed by a surge in various altcoins. For instance, in the 2013 bull market, Bitcoin’s value soared from about $145 to over $1,200, setting a precedent for subsequent bull markets​​. This pattern repeated in the following years, with Bitcoin consistently achieving significant gains before a broader market rally​​.

The NFT warning

Despite the usual trend of Bitcoin’s initial surge followed by altcoins, Helseth projects a different trajectory for NFTs in the next bull cycle. He anticipates that the initial bullish momentum in the market might lead to an increase in NFT wash-trading, creating a brief surge. However, he predicts this momentum will fizzle out quickly​​​​. Helseth bases his prediction on the reduced hype surrounding NFTs and their performance history. He asserts that being on a blockchain doesn’t guarantee value appreciation for NFTs and cautions against expecting significant returns from NFT trading.

Understanding the NFT market dynamics

Helseth’s viewpoint stems from an observation of previous market cycles. In past bull markets, a pattern emerged where Bitcoin led the way, followed by altcoins like Ethereum (ETH), meme coins, Ethereum-killers, and DeFi tokens. Notably, the NFT frenzy usually erupts just before the market turns bearish again​​. However, Helseth believes the allure of NFTs has faded, and the public, having learned from past experiences, is likely to be more cautious.

Conclusion

The key takeaway from Helseth’s analysis is the need for prudent investment strategies in the crypto market. While Bitcoin and altcoins have shown consistent patterns in bull markets, the NFT segment may not replicate its past performance. Investors are advised to approach the NFT market with caution, keeping in mind the potential for short-lived surges and the need for impeccable timing in trading​​. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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