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The buyer of Beeple's $69 million artwork now says NFTs are a huge risk as talk of a bubble grows

Published by Business Insider on Wed, 07 Apr 2021


<p><img src="https://static2.businessinsider.com/image/606dbec830004b0019b2662b-2400/2021-03-11T160441Z_3_LYNXMPEH2A1D1_RTROPTP_4_AUCTION-CHRISTIE-S-NFT.JPG" border="0" alt="2021 03 11T160441Z_3_LYNXMPEH2A1D1_RTROPTP_4_AUCTION CHRISTIE S NFT.JPG" data-mce-source="Christie's Images Ltd 2021/Beeple/Handout via Reuters" data-mce-caption="Vignesh Sundaresan bought Beeple's &amp;quotEverydays&amp;quot NFT for $69 million"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul class="summary-list"><li>The buyer of Beeple's $69 million NFT has said investing in the assets is a "huge risk."</li><li>Vignesh Sundaresan said he thinks the hype around NFTs will fade.</li><li>A number of people are warning about a bubble in NFTs, and the market has slowed sharply.</li><li id="recirc"><strong><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</strong></li></ul><p>Investing in non-fungible tokens is a "huge risk," according to the entrepreneur who spent $69 million on an NFT has said. His voice is the latest in a growing number of figures to strike a skeptical tone about the market.</p><p>Vignesh Sundaresan, a crypto investor who cofounded bitcoin ATM company BitAccess, <a href="https://www.bloomberg.com/news/articles/2021-04-06/crypto-whale-behind-69-million-nft-sees-huge-risk-for-traders'sref=Yg3sQEZ2">told Bloomberg</a> on Tuesday that investing in NFTs is "even crazier than investing in crypto."</p><p>Sundaresan's warning came despite the fact that the entrepreneur spent <a href="https://www.businessinsider.com/beeple-nft-mike-winkelmann-digital-art-christies-2021-3'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest">$69 million</a> buying an NFT artwork by Beeple called "Everydays: The First 5,000 Days." It made Beeple the third-most-expensive living artist.</p><p>"I don't think NFTs will hold the same kind of hype forever around high-value items," Sundaresan, who is also known as MetaKovan, told Bloomberg. "The market will get divided. There will be very few high-value items and an infinite number of very low-valued items."</p><p><a href="https://www.businessinsider.com/what-does-nft-mean-crytpo-non-fungible-tokens-art-explained-2021-2#:~:text=Non%2Dfungible%20tokens%20account%20for,of%20Insider%20for%20more%20stories.'utm_source=markets&amp;utm_medium=ingest'utm_source=markets&amp;utm_medium=ingest">Non-fungible tokens, or NFTs</a>, are a special class of digital assets that cannot be exchanged with one another for equal value, or broken down into smaller bits. They often operate as a type of collectors' item and cannot be duplicated.</p><p>They are the hottest new thing in the crypto world, with superstar artist <a href="https://markets.businessinsider.com/currencies/news/damien-hirst-nft-non-fungible-token-ethreum-palm-currency-project-2021-3-1030258965">Damien Hirst</a> and musicians <a href="https://markets.businessinsider.com/currencies/news/snoop-dogg-lionel-richie-nfts-non-fungible-token-cryptocom-marketplace-2021-3-1030237655'utm_source=markets&amp;utm_medium=ingest">Lionel Richie and Snoop Dogg</a> getting in on the game.</p><p>But there are signs that the initial wave of interest in NFTs may be declining. Data from <a href="https://www.theblockcrypto.com/post/100240/did-we-already-see-the-peak-of-the-nft-boom">The Block</a> showed that weekly NFT trading volumes reached $196 million in late February. But it had tumbled to $34 million by March 28.</p><p>Crypto exchange founder Bobby Lee told Insider that he thought a bubble is forming in some parts of the market.</p><p>He said that the technology itself is sustainable, but added that investors should be cautious about getting into specific classes of NFTs.</p><p>"Likely it can get over-hyped and you could lose money," he said.</p><p>Antoni Trenchev, co-founder of crypto banking firm Nexo, told Bloomberg TV on Wednesday that he was also concerned about a bubble in NFTs.</p><p>"If there's anything akin to a bubble within crypto I would argue it's within the NFT space," he said. "One has to be cautious this late in the bull cycle with NFTs."</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/crypto-vc-founder-investment-strategy-understanding-defi-for-beginners-pluto-2021-4" target="_blank" rel="noopener">A crypto founder breaks down how he secured $50 million in assets under management within 3 months of launching a VC firmand shares how investors should approach understanding the DeFi space</a></em></p><p><a href="https://markets.businessinsider.com/news/stocks/nft-market-outlook-huge-risk-beeple-buyer-bubble-vignesh-sundaresan-2021-4-1030282090#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-symphony-seas-worlds-largest-cruise-ship-deals-with-waste-2020-3">How waste is dealt with on the world's largest cruise ship</a></p>
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