The Taiwan central bank warned investing in NFTs can actually be very dangerous since many of the transactions in the sector are fake, so let’s read more today in our latest cryptocurrency news.
The Central Bank of The Republic of China or the Taiwan central bank warned the NFT sector is full of fake transactions and advised investors to be careful when investing in such assets. According to reports from Taiwan News, the nation’s central bank doesn’t find dabbling with NFT as an appropriate strategy, and citing a survey, the institution reminded that less than 30% of the investors make a profit when selling digital collectibles.
NFTs can define both the digital and the physical objects. As such, one could prove ownership over those assets and will verify their authenticity. The bank argued that the quality is doubtful because every individual can produce a digital collectible and then use it to steal data. Last year we saw American YouTuber Logan Paul joining the NFT craze by partnering with Bondly Finance and vowed to create and distribute NFT tokens for Paul’s Pokemon Break Box. The American dived into the space a few months later again but his actions sparked doubts among investors. He was alleged to have photoshopped images for his project and later sold the fake items to investors for millions of dollars.
The Central Bank of Taiwan furhter noted that despite the progress last year, the NFT market slowed down and the number of traders was not more than 75,000 in 2020. In 2021 however, it surged to 2.3 million people. It is also worth noting that NFT trading volumes are charting their most impressive peaks and at the end of August 2021, they surpassed $500 million in one day. However, the trends changed and the hype cooled off. Last week, the American business magnate Bill Gates, advised investors to pay extra attention when trading NFTs because they are often based on the “greater fool theory” and he noted that the digital images of monkeys are going to improve the world.
With his comments, he referred to the bored Ape Yacht Club apparently which is an NFT collection featuring caricatures of monkeys. Despite Gates’ negative opinion of them, plenty of celebrities already spent millions to acquire some of the collectibles. Madonna for example and Serena Williams are only some of the examples.
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