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NFT Market Will Bounce Back With Lower Interest Rates, Digital Artist Says
Ovie Faruq, also known as OSF, says the sector is tied to cryptocurrencies, which in turn are correlated with Nasdaq.
Dec 30, 2022, 6:26 p.m.
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One of the leading artists in Web3 sees one way for non-fungible tokens (NFTs) to bounce back from the crypto winter: the Federal Reserve lowering interest rates.
Ovie Faruq, who is also known as OSF, told CoinDesk TV’s “First Mover” on Thursday that once that happens, equities will have room to rally, giving digital collectibles the runway to rise again.
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“What most of the NFT market has realized is that it's this hybrid asset,” said Faruq, a former credit derivatives trader at Barclays. “But it is correlated to crypto, which is correlated to Nasdaq, which is correlated to global financial markets.”
Read more: Most Influential Artist: Ovie Faruq
According to blockchain data tracker CryptoSlam, global NFT sales declined by 89% in November from a peak of $5 billion in January, Bloomberg reported.
The nosedive in NFTs sales is influenced by the Fed raising interest rates in the face of all-time high inflation coupled with “tourist money” swiftly leaving the market. That leaves retail investors in a tough spot, according to Faruq.
Nonetheless, NFTs may have increased utility down the road as users move toward digital identities.
“This general change in secular trends, that's something that will not change and will continue to escalate and become a larger part of our lives,” Faruq said.
The 33-year-old recently created “Market Wizards” for CoinDesk’s Most Influential 2022, which features four of crypto's biggest scammers. The piece sold for 41 ETH on crypto exchange Coinbase (COIN).
“There will be a lot of art that comes out of this year … and collecting pieces that reflect that will be something that will potentially have a lot of value in the future,” Faruq said.
Read more: Presenting CoinDesk's Most Influential 2022
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