Taiwan Central Bank Criticizes NFTs: Hype has Faded, Facing Existential Crisis!

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Taiwan Central Bank's Account of the Rise and Fall of NFTs

The Taiwan Central Bank's financial knowledge section provides annotations on the development of NFTs and believes that they are heading towards extinction:

1. NFT: Yesterday's Star, Today's Dream

In 2021, NFTs attracted global attention with their technological innovation and cultural status. At that time, the market reached its peak enthusiasm, with NFT market value surpassing $40 billion, almost equivalent to the global art market. Participation from celebrities like Justin Bieber and Neymar Jr., along with the unique environment of the COVID-19 pandemic, added fuel to the popularity of NFTs.

2. From Peak to Trough: Rapid Decline of the NFT Market

In September 2022, the NFT market rapidly cooled down from its peak in January, with trading volume plummeting by 97%, leading to a collapse in market value. The value of prominent collections like the Bored Ape Yacht Club dropped by over 90%. An article from "Business Insider" noted that about 95% of NFTs are currently worthless.

Last year's collaboration with Bored Ape, Rolling Stone's latest report: Your NFTs Are Worthless

3. Bubble: The Truth of the NFT Market

A study from the University of St. Gallen in Switzerland revealed that the NFT market was filled with speculative bubbles from 2021 to 2022. The research indicated that the price increases of many NFTs were short-lived and would soon collapse. This value inflation was more driven by speculation rather than fundamental factors.

4. UK Government's Reflection: Suspension of NFT Plans

In April 2022, the UK Treasury planned to issue government-backed NFTs through the Royal Mint to showcase foresight in new technology. However, due to the bubble in the NFT market and the instability of the cryptocurrency market, the project was announced to be suspended in March 2023.

In summary, the Taiwan Central Bank stated that it is currently impractical to issue NFTs.

However, since the cryptocurrency market has rebounded in 2023, there has been a recent rise in the prices of many NFT collections. It may be challenging to convince everyone that NFTs are dead.