The Central Bank of the Republic of China (Taiwan’s central banking institution) reportedly warned that the non-fungible token (NFT) sector is full of fake transactions. Accordingly, the Central Bank of the Republic of China (Taiwan’s central banking institution) advised investors to be careful when dealing digital collectibles.
NFTs are a great investment opportunity.
According to a recent report by the Taiwan News, the nation’s central bank does not find dabbling with NFTs as an appropriate investment strategy. Citing a survey, the institution reminded that less than 30% of investors profit when selling digital collectibles, while every third produced artwork doesn’t end up sold.
NFTs can be used to identify digital and physical objects. One could then prove ownership of the assets and verify their authenticity. The bank however argued that this quality is questionable as anyone could create a digital collection and steal data.
Last year, the American YouTuber – Logan Paul – joined the NFT craze by partnering with Bondly Finance. They vowed to create and distribute non-fungible tokens for Paul’s “Pokemon Break Box.”
The American re-entered the space several months later, but investors were skeptical of his actions. The American was alleged that he had photoshopped stock images in order to make Cryptozoo, and then later sold these fake items to investors at a profit of millions of dollars.
Further, Taiwan’s central bank noted that the NFT market had slowed down in recent years despite its gains last year. In 2020, there were only 75,000 traders, but a year later it soared to 2.3million.
Notable is the fact that NFT trading volumes reached their highest peak last summer. They exceeded $500 million for one day in August. However, things changed and the craze for the internet slowed down in September.
Bill Gates’ Thoughts on NFTs
Last week, the American business magnate and Co-Founder of Microsoft – Bill Gates – advised investors to pay extra attention when trading NFTs because they are based on “the greater fool theory.” The billionaire sarcastically noted that “digital images of monkeys are going to improve the world immensely.”
With his comments, he most likely referred to the Bored Ape Yacht Club (BAYC) – an NFT collection featuring different caricatures of monkeys. Despite Gates’ negative opinion of them, numerous celebrities have already spent millions to acquire some of the collectibles. Some examples include Madonna, Neymar, the Brazilian soccer star, and Serena Williams, the tennis champion.