NFTs may not perform as expected during the next bull cycle

In an X-post shared earlier today, head of research at K33 Research, Anders Helseth, warned people to avoid NFTs during the next bull cycle. Helseth pointed out that in previous bull cycles, Bitcoin (BTC) initially performed well, then altcoins started to shine as the bull market gained momentum.

The reasons for altcoins’ positive performance following BTC’s surge vary from cycle to cycle. However, Helseth believes that the one common thread between the previous bull cycles is the fact that these coins usually don’t prove to be that valuable in 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 performance of altcoins including Ethereum (ETH), meme coins, Ethereum killers and DeFi tokens. And just before the market turns bearish again, an NFT frenzy usually ensues.

Helseth is confident that the next bull cycle will not follow this pattern, especially when it comes to NFTs. He predicts that as bullish momentum increases, there could be an increase in NFT wash trading, which could lead to a short-term rise as people try to repeat the past. However, according to the researcher, this momentum is likely to dissipate soon.

He based his prediction on the fact that the hype surrounding NFTs seems to have died down. He stated that just because NFTs are on a blockchain does not mean that they will automatically increase in value.

Helseth does believe there are some use cases for NFTs, but stands by his belief that there are very few opportunities for 1000x profits when it comes to NFT trading. Some of the unclear value capture mechanisms of certain NFT projects have also left researcher fatigued.

Overall, Helseth believes that people have learned from their past mistakes when it comes to trading NFTs. At the end of his post, Helseth bluntly told people to “stay away from NFTs.”