A basic premise when it comes to price movements in crypto has consistently been that when bitcoin makes a significant move, everything else follows. And, frequently when it comes to altcoins the movement can be amplified.
So, if a macro, geo-political event (a war breaks out on the eastern edge of Europe, for example) causes BTC to take a sharp drop, then younger, more flyaway Layer 1s, such as Cardano and Solana, will take an even more precipitous fall.
And, it’s the same on the way up too. If you’re looking to grow your investment by multiples of ten, then you’re going to have to drop some cash into the risky small and micro caps, and make sure to get it out again in time. But, you’ll likely still be checking on BTC first as your primary market indicator.
In the last year or so, something new has broken to the foreground of the crypto world, in the shape of NFTs. It’s striking that NFTs have, without any particularly deliberate effort, found their way into the mainstream, non-crypto consciousness. Paris Hilton and Jimmy Fallon discussed their non-fungible acquisitions on primetime American TV. Justin Bieber picked up a couple of Bored Apes too. Christie's and Sotheby's auctioned off weird digital crafts for tens of millions of dollars.
The dog days of 2020 were dubbed DeFi Summer, but not many people not already enthusiastic about crypto were aware of that, and still now DeFi remains, for those not used to using crypto, and even for some who are, fringe and esoteric, although it’s to be hoped that it attracts more users.
NFTs, though, are a departure. Sure, Bitcoin (and Ethereum to an extent) has always had a certain hacker-ish allure. Nerdcore, for certain, but associated also with cypherpunks and Silk Road. Altcoins have always been scammier, more liable to pump and dump, but worth a punt, and yes, occasionally even building out worthwhile products.
Then, as mentioned, there’s DeFi, which came across as financially exotic and potentially lucrative, as long as no rugs got pulled, or everyone got suddenly spooked.
But still, all of these were numerical interests, involving lines on charts and technical analysis, candlesticks and moving averages and Fibonacci.
And then along came NFTs.
Tokens on the blockchain , still. Tradable and offering the chance for quick-flip gains, or life-changing jackpots if you kept hold of the right ones. But, at the same time, what was this, some kind of visual, creative art? Happening here, in the degen crypto world?
One of ones, generative psychedelia, pixelated monstrosities, meme-addled peculiarity, sci-fi nostalgia, tasteful photography, and legion upon legion of cartoon animals smoking and wearing hats.
It was crypto, but crypto on shrooms, late at night and deep down the rabbit hole. Cozy, oblivious, and, sometimes, in the right place at the right time, hilariously profitable.
And so, returning to the opening point, how do NFTs fit into broader market movements and the overall crypto sentiment?
There is a view among some observers that NFTs are a bubble (but then, isn’t everything?) and that they should be the most precarious place in which to park your cash.
“War is coming, buy gold and some of those monkey JPEGs,” said no-one.
And yet, up to now, when the rest of crypto has jolted, frazzled, into panic and fear, the NFT space has responded by making, buying and selling NFTs. Or in other words, the NFT space has barely responded at all, preferring instead to vibe through the ups and downs, pacific and enlightened, treating both highs and lows as temporary guests.
This is not to say that prices can’t crash, or that many projects won’t go to zero, or that, in some unpredictable way, all this might change, but what’s become apparent is that NFTs, and the NFT quarter of the crypto map, are distinct and different from everything up to now.
This, if you’re interested in the overall health of Bitcoin and crypto, seems like a beneficial development. Having said that, it’s likely that many bitcoiners (the maxi kind, who are hostile towards other blockchains) don’t care about NFTs and might not welcome the association, but, when it comes down to it, the association is there.
What looks possible now is that NFTs will break away further from the rest of the crypto environment. Not only do NFTs have their own culture and characteristics, but they also infiltrate more immediately into previously non-crypto areas of life. The art world, most obviously, but also music, gaming and collectibles.
Strangely, NFTs come across as both the area of crypto that has best captured mainstream attention, but also as something curiously outsider. They’re outsider art, on an outsider medium, utilizing outsider mechanisms, and they’re outsider crypto too. And yet, they’ve gone a long way towards bringing crypto to the inside of popular culture.
