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NFTs Backed By Gold and Precious Metals Can Create a Robust Portfolio

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NFTs: What could non-fungible tokens and gold possibly have in common? More than you think, says Ahren Posthumus, the CEO of NFT marketplace Momint.

The NFT sector has been hit hard by the crypto market’s crash and economic uncertainty. Traditional assets are also becoming less reliable. The convergence of NFT and safe assets like gold could resolve this global issue.

NFTs: Promising but volatile

When the market as a whole went down, blue chip NFT collections lost up to 80% of their worth. Everyone talked about the obvious reasons, like Terra’s crash and Celsius’ bankruptcy, but these were only the tip of the iceberg.

The main cause, in my opinion, is the scarcity of projects and collections with solid fundamentals and real value at their core. Some investors may be interested in tokenized memes and tweets, as well as digital merch and art. But these applications are not enough to move the whole sector forward. So, in just a few weeks in May, the average number of non-fungible tokens sold each day dropped to about 19,000. According to the Wall Street Journal, which cited nonfungible.com, this was a 92% drop from September, when about 225,000 non-fungible tokens were sold each day. After the economic boom ended, it became clear that there were far too many projects that were nearly identical and only provided a quick return.

NFTs Aren’t the Only Bubble

The same thing happened when the dot-com and housing bubbles burst, so there’s nothing new here. It simply means that NFTs and cryptocurrencies must mature to regain investors’ trust.

People commonly associate non-fungible tokens with art, but this is either untrue or partially true. NFTs function as digital certificates of authenticity and can represent a range of things from IP or property rights to legal agreements and membership access. They can only have one holder
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