Crypto investors remain steadfast amid bitcoin market meltdown
Yahoo Finance reporter David Hollerith explains the current mindset of crypto investors amid bitcoin's volatility.
BRIAN CHEUNG: Well, let's shift gears over to crypto. NFT NYC for non-fungible tokens is in town, all during a time of massive crypto volatility. Here with the vibe check on the parties, Yahoo Finance's crypto wizard David Hollerith joins us in studio. By the way, great to see you, David.
DAVID HOLLERITH: What's up, Brian? Good to be here.
BRIAN CHEUNG: All right, so you were at the NFT events yesterday. Look, this is supposed to be a big event where everyone who's in the community kind of gets excited about those Bored Apes and about those CryptoPunks.
DAVID HOLLERITH: Absolutely.
BRIAN CHEUNG: But people are losing their pants out there with the spill in crypto. What's-- like, what are you hearing in terms of what people are saying?
DAVID HOLLERITH: Yeah, I mean, I think NFTs are, like, one of the frontiers of crypto. So it's, like, the most nascent, you could say. So there's still a lot of speculation and hype, obviously, around it. And a lot has not come to fruition yet. So I think a lot of people are generally OK with the idea that there's still future potential for more. So what a lot of people say is, I'm in it for the technology I'm, like, building. That's what I hear. There's a lot less interest in the investment aspect, at least from what people have sort of brought up to me.
That being said, the art market moves typically a lot different than cryptocurrencies, for example. So NFTs sort of deal with that. And they also-- the value in trading volume of NFTs will sometimes fall based on whether or not cryptocurrencies fall. So there's a lot to consider. They don't move exactly like crypto, is what I'm saying.
BRIAN CHEUNG: On volume, actually, that is interesting because we were looking at data on OpenSea recently. And you notice that things just kind of drop like a rock in terms of not only the volume of crypto in US dollars, and you convert it, but also the amount of users that are on the actual platform to begin with. So, you know, I was talking to a trader at an event, an NFT trader who made, like, millions during the rip up. And he was saying, I'm not touching anything right now, not because he doesn't see attractive art or cool projects, but because there's no counterparties to interact with right now.
DAVID HOLLERITH: Yeah, I mean, I think that-- so you're saying there are no buyers.
BRIAN CHEUNG: Yeah, well, I mean, that's what the NFT community seems to be at-- this is the stage that they're in right now. But a lot of that could be because of the macro environment. Bitcoin and everything else is spilling right now. It's not that Terra has an immediate, I guess, link to why people would or wouldn't want an actual piece of art that's digital. But it just seems to be, like, the liquidity story is kind of a big reason for why people are saying, I'm just going take a breather for right now.
DAVID HOLLERITH: Yeah, I think that's definitely true. Again, NFTs are wide. So, like, these fine art NFTs are obviously very expensive. And then when you have these smaller gaming NFTs, the prices could look somewhere between $10,000 and to $100 even--
BRIAN CHEUNG: What's a gaming NFT project that you've seen that's kind of caught your eye or that's interesting?
DAVID HOLLERITH: So that's an interesting point, is the fact that a lot of those games are not out yet. One is called, like, Zebedee, which is sort of like-- it doesn't actually use NFTs. It uses crypto gaming. But Illuvium, Inverse Sword. Axie Infinity is the big one that is actually being used, and it's in fruition. But it's a very low tech game in terms of, like, other online games that we're used to, if that makes sense. So--
BRIAN CHEUNG: Well, Axie Infinity, though, they had that hack not long ago. And then obviously, we know all the stories about the crypto projects that have blown up, right? Terra. You have hedge funds now that were exposed to them blowing up. You now have Voyager. So, I mean, things are spilling over. So, I mean, you know, how much confidence is there when you see at a conference like NFT NYC, you see a new project. You're like, wow, I want to be excited about this, but at the same time, like--
DAVID HOLLERITH: Yeah. Well--
BRIAN CHEUNG: --this thing might go bust.
DAVID HOLLERITH: I mean, Brian, I think it's worth pointing out that, like, a lot of these people are not as in tune with financial markets writ large as we are. And so there are a lot of artists there, too. So there are people-- a lot of people are coming to build and potentially sell a product. So a lot less of the investment talk that I've heard. But I think you will still try and find-- you will still see people trying to find money, even though things do get worse.
BRIAN CHEUNG: Should I do the Hexagon NFT on my Twitter avatar?
DAVID HOLLERITH: Yeah.
BRIAN CHEUNG: I've been thinking about it. I don't know if I should.
DAVID HOLLERITH: It's an OG sign. Well, a lot of people don't do that because they think it's cool not to do it.
BRIAN CHEUNG: Oh, contrarian.
DAVID HOLLERITH: Yeah.
BRIAN CHEUNG: OK. Well, if you're not doing it, then I won't do it. If our crypto reporter is not going to do it, then I'm not gonna do it.
DAVID HOLLERITH: Yeah, I mean-- yeah, it's keeping NFTs off the table, you know.