Exponential currency debasement: ‘You don’t own enough crypto, NFTs

Crypto and art NFTs can help investors protect their purchasing power from ongoing fiat currency debasement, according to Raoul Pal.

Cryptocurrencies and non-fungible tokens (NFTs) can help investors protect their eroding purchasing power during an era of exponential currency debasement, according to analysts and industry leaders.

Investing in digital assets is becoming increasingly important in the “world of the exponential age and currency debasement,” according to Raoul Pal, founder and CEO of Global Macro Investor.

“You don‘t own enough crypto. When you do, you don’t own enough NFTs, as art is upstream of wealth. Both will never be this cheap again,” Pal said.

NFTs are “the single best long term store of wealth I know and you get to buy it before network effects kick in,” he added in another response.

Source: Raoul Pal

“There is some validity to the statement that NFTs, and in extension art, become a vehicle for the wealthy once a certain level of wealth is reached,” wrote Nicolai Sondergaard, research analyst at Nansen, calling it a “natural move” for asset diversification.

“For traders and investors, further down the wealth curve, NFTs are partially about speculating on future returns,” he told Cointelegraph, adding that NFTs also benefit from the allure of strong communities, beyond just wealth creation.

Art NFTs may see a resurgence as “digital ownership gains acceptance among younger, tech-savvy cohorts,” if collections manage to move past the “speculative fervor,” according to Anndy Lian, author and intergovernmental blockchain expert.

Still, Lian said broader adoption depends on blockchain networks improving scalability and security to “instill confidence.” He added that art NFTs “must transcend hype, anchoring value in cultural significance or utility.”

Beeples “Everydays: The First 5000 Days.” Source: Christies

Some digital artists made millions of dollars through NFTs. Digital artist Mike Winkelmann, also known as Beeple, auctioned his “Everydays: The First 5000 Days,” NFT artwork for a record-breaking $69 million in March 2021.

Meanwhile, the largest NFT collections continue to lack upside momentum, unable to recover toward their 2021 highs.

CryptoPunks floor price, all-time chart. Source: NFTpricefloor

CryptoPunks, the largest NFT collection by market capitalization, is currently trading at a floor price of 46 Ether (ETH), 59% down from its peak of 113.9 ETH, recorded on Oct. 9, 2021, NFTpricefloor data shows.

NFT market set for recovery in early 2026, after Bitcoin cycle top

Despite the temporary lack of interest, NFTs could be poised to see more momentum after the profits from Bitcoins (BTC) cycle top start rotating into other digital assets.

“That likely puts the peak of the NFT market in Q1 2026, but dont expect a repeat of the 21/22 euphoria that we saw in NFTs,” according to Yehudah Petscher, strategist at CryptoSlam NFT data platform and SlamAI.

“Were likely an entire cycle away from NFTs having a parabolic run,” Petscher told Cointelegraph, adding:

“There is a perfect storm brewing for 2030: BTC at $1 million, a matured metaverse, AI reshaping labor economics (whether through universal basic income or universal high income, falling production costs, etc), AR/VR adoption, and NFT ownership equaling ownership of a brand.”

However, the previous NFT bull market was driven largely by metaverse speculation and wealthy traders, Petscher noted — factors that are mostly absent in the current cycle.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.