Earlier this month, an image of a pet rock sold for the equivalent of more than US$200,000 (RM936,900) on the non-fungible token market.
Meanwhile, the market capitalization of a cryptocurrency called Pepe (a meme coin based on a cartoon frog) doubled in just a few weeks. And even the price of the FTT token, which was created by the FTX exchange and currently has no real utility, has tripled in the last month on the hope that Sam Bankman-Fried's exchange will return from the dead.
Everywhere you look, there are signs that the cryptocurrency market's extravagant excesses (and the fear of losing them) are returning. As expectations of an imminent approval of a Bitcoin exchange-traded fund push the oldest and largest cryptocurrency ever higher, the hype has also buoyed other ships, even those considered among the least seaworthy. .
This latest surge in digital trash comes after a nearly two-year-long crypto winter in which the value of thousands of dubious projects fell (some to near zero) to the delight of critics and even some industry experts. Aggressive actions by the Securities and Exchange Commission marked some cryptocurrencies as illegal and scared away some cryptocurrency promoters. It now appears that the cleanup was only temporary.
"As prices rise, investors on the sidelines think they need to get in," said Campbell Harvey, a finance professor at Duke University. "Many will violate the number one rule of investing: understand what you are investing in. Many will too." violating rule number two by putting your money on a non-diversified bet on a single chip.โ
Social media is once again filled with posts promoting meme coins. One of them is simply called Memecoin, which was created earlier this year and skyrocketed in value this month. Its brief whitepaper, where disclaimers take up as much space as explanations, notes that the token "has no functions, no utility or intrinsic value, and no promise or expectation of any financial return, profit, interest or dividend."
โLooking for a new theme to collect worthless money from customers โ that's the theme in non-Bitcoin cryptocurrencies,โ Cory Klippsten, CEO of Bitcoin service provider Swan, said in an interview. โI guarantee you there will be another cycle of altcoin hype, and more people will get hurt.โ
Static images of rocks linked to the Ethereum and Bitcoin blockchains are selling again for surprising prices. Bitcoin Rock #75 recently sold for almost three Bitcoins, or around US$112,900 (RM528,880). The collection, like many others, is run by a small group of people. And like most NFT collections, the rocks are not very liquid. Meanwhile, a large number of projects are conducting NFT land sales (effectively selling NFTs of properties within digital gaming territories), despite many participants in previous generation projects getting burned.
"It's important to keep in mind the current climate of what could be described as a mini bull market," said Sara Gherghelas, an analyst at research firm DappRadar. โThis environment has infused the NFT space with a new wave of enthusiasm and speculative investment, which can sometimes inflate the prices of projects that might otherwise have limited long-term value.โ
TG Casino, focused on offering anonymous crypto gambling on Telegram, has raised over $2 million in a token pre-sale, including the sale of NFTs to high rollers. In years past, people's investments in many token sales crashed and burned.
Amid the frantic race to the latest trendy token, some buyers end up being duped by scams in which the coin's creators disappear along with the liquidity. In the third quarter, carpet attacks accounted for 65.1% of all attack types in crypto, according to blockchain security auditor Hacken.io.
โOptimists are seeing crypto winter thaws, and even green shoots,โ said Aaron Brown, a crypto investor who writes for Bloomberg Opinion. โIf we are truly at the beginning of the crypto spring, good new ideas should take attention away from the nonsense. If not, the garbage should return to obscurity.โ โBloomberg
