NFT – Not a Fair Trade?
7 October 2022 | The University of Waikato News
Promising get-rich-quick opportunities, the market for NFTs has boomed in recent years, reaching a peak of $2.7 billion in NFT transactions in May 2022. But NFTs are an exceptionally risky purchase and the bubble is very much at risk of bursting, according to Professor Shaen Corbet, cryptocurrency specialist and visiting professor of Finance at Waikato Management School.
Professor Corbet is calling for increased regulation of both NFTs and cryptocurrency and more transparency among those endorsing digital investments.
“We must also protect innocent bystanders from the worst side-effects of these assets,” he says.
“FinTech investment remains extremely risky and is consistently targeted at the most risk-taking groups within society, similar to gambling products and get-rich-quick schemes. Many of these assets are simply ponzi schemes and rug-pulls. However, irrational exuberance and greater-fool theory take hold, propagating ridiculous asset bubbles.”
The Elliptic NFT Report 2022 found that more than $100m (NZ$163m) worth of NFTs were publicly reported as stolen through scams between July 2021 and July 2022, with an average of $300,000 (NZ$490,000) per scam.