- The buyer of
Beeple 's $69 million NFT has said investing in the assets is a "huge risk." - Vignesh Sundaresan said he thinks the hype around
NFTs will fade. - A number of people are warning about a
bubble in NFTs, and the market has slowed sharply.
Investing in non-fungible tokens is a "huge risk," according to the entrepreneur who spent $69 million on an NFT has said. His voice is the latest in a growing number of figures to strike a skeptical tone about the market.
Vignesh Sundaresan, a crypto investor who cofounded bitcoin ATM company BitAccess, told Bloomberg on Tuesday that investing in NFTs is "even crazier than investing in crypto."
Sundaresan's warning came despite the fact that the entrepreneur spent $69 million buying an NFT artwork by Beeple called "Everydays: The First 5,000 Days." It made Beeple the third-most-expensive living artist.
"I don't think NFTs will hold the same kind of hype forever around high-value items," Sundaresan, who is also known as MetaKovan, told Bloomberg. "The market will get divided. There will be very few high-value items and an infinite number of very low-valued items."
Non-fungible tokens, or NFTs, are a special class of digital assets that cannot be exchanged with one another for equal value, or broken down into smaller bits. They often operate as a type of collectors' item and cannot be duplicated.
They are the hottest new thing in the crypto world, with superstar artist Damien Hirst and musicians Lionel Richie and Snoop Dogg getting in on the game.
But there are signs that the initial wave of interest in NFTs may be declining. Data from The Block showed that weekly NFT trading volumes reached $196 million in late February. But it had tumbled to $34 million by March 28.
Crypto exchange founder Bobby Lee told Insider that he thought a bubble is forming in some parts of the market.
He said that the technology itself is sustainable, but added that investors should be cautious about getting into specific classes of NFTs.
"Likely it can get over-hyped and you could lose money," he said.
Antoni Trenchev, co-founder of crypto banking firm Nexo, told Bloomberg TV on Wednesday that he was also concerned about a bubble in NFTs.
"If there's anything akin to a bubble within crypto I would argue it's within the NFT space," he said. "One has to be cautious this late in the bull cycle with NFTs."