In an X post shared earlier today, the head of research at K33 Research, Anders Helseth, cautioned people to steer clear of NFTs during the next bull cycle. Helseth pointed out that in previous bull cycles, Bitcoin (BTC) performed well initially, after which altcoins started to shine as the bull market gained more momentum.
Stay away from the NFTs!
by Head of Research @andershelsethHistory rhymes but does not repeat.
Faced with a brewing bull run, anticipatory traders will be wise to acknowledge the above saying. The dynamic of a bull cycle has always been that Bitcoin outperforms first,…
— K33 Research (@K33Research) December 12, 2023
The reasons for the positive performances of altcoins after BTC’s surge differ from cycle to cycle. However, Helseth believes that the one common thread between the previous bull cycles is the fact that these coins usually turn out to be not so valuable over the longer term.
Looking back at the previous bull cycle, the researcher pointed out that the pattern started with BTC leading the way, followed by the positive performances of altcoins, including Ethereum (ETH), meme coins, Ethereum-killers, and DeFi tokens. And just before the market turns bearish again, an NFT frenzy usually emerges.
Helseth is convinced that the next bull cycle will not follow this pattern, especially when it comes to NFTs. He predicts that as bullish momentum increases, there might be an increase in NFT wash-trading, leading to a brief surge as people try to repeat the past. However, this momentum will likely fizzle out quickly, according to the researcher.
He based his prediction on the fact that the hype surrounding NFTs seems to have faded. He stated that just because NFTs are on a blockchain does not at all mean that they will automatically increase in value.
Helseth does believe that there are some use cases for NFTs but sticks to his belief that there are very few opportunities for 1000x gains when it comes to NFT trading. Some of the unclear value capture mechanisms of certain NFT projects have also made the researcher weary.
Overall, Helseth believes people have learned from their past mistakes when it comes to trading NFTs. At the end of his post, Helseth outright told people to “stay away from the NFTs.”
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