The Wall Street Journal has declared that the NFT Market is collapsing. As we saw with cryptocurrencies in May and June, the NFT market has dropped significantly in recent months as well. The Wall Street Journal reports that at the height of the nonfungible token excitement, 225,000 NFTs sold in one day. In early May, the daily average dropped 92% to 19,000.
Young investors looking for alternatives to the traditional routes of investing are seeing this new market shrink exponentially, along with the value of their investments. As discussed in our article about crypto in your 401(k) (link to article), rising interest rates along with inflation are squashing risky investments across all financial markets. NFTs and Cryptocurrencies are among the most speculative investments and are seeing a major crash at the moment.
According to Business Insider, it was found that over 50% of 18- to 29-year-olds that responded to a survey saying they had invested in bitcoin did so by going into debt to fund the investment. 23% used a credit card, 17% used a student loan, and 16% used another kind of loan. This crypto and NFT crash not only caused young investors to lose the value of their digital assets, but also go deeper into debt which they used to purchase the assets in the first place!
It is possible that many young people have found their first investing opportunities with cryptocurrencies. As always, consulting a financial advisor before making any risky investments is essential to financial safety.