Will virtual assets (such as NFTs) be the next bubble?

Financial CrisisVirtual AssetsNFTFoamInvestingDigital Economy
Views: 0Created At: 9/9/2025Updated At: 9/17/2025
Vinzenz Vollbrecht
Vinzenz Vollbrecht
Retired fund manager, now an investment advisor.

Hello, that's a great question about whether NFTs are the next bubble, and it's something many people are discussing. I'll try to share my thoughts with you in plain language.

Are Virtual Assets (like NFTs) the Next Bubble?

My view: Yes, it exhibits most characteristics of a bubble, especially during its peak popularity in the past two years. However, this doesn't mean it will burst completely and disappear without a trace, like some bubbles.

Let's look at this from a few angles:

1. What is an NFT? Imagine it as a 'Digital Deed'

First, you need to understand what an NFT actually is.

Forget the complex blockchain technology; just think of an NFT as a 'digital deed of ownership' for a digital item.

For example, there's a very popular image online that anyone can copy and download. But if you buy the NFT for that image, it's like owning an 'original certificate of ownership' personally signed and stamped by the artist. Everyone can still see the image, but only you can prove: 'Hey, the original version of this thing is mine!'

This 'certificate' is recorded on the blockchain, making it impossible to forge or tamper with, and it's verifiable by anyone in the world.

2. Why is it like a bubble?

Whether something is a bubble primarily depends on whether its price far exceeds its intrinsic value, and if people are buying it not for use, but to wait for its price to rise and then sell it.

From these perspectives, the NFT market at its peak was the epitome of a bubble:

  • Astronomical Prices: An avatar, an image, or even a tweet, could easily sell for hundreds of thousands or millions of dollars. A piece by digital artist Beeple, 'Everydays: The First 5000 Days,' sold for $69.3 million—a price incomprehensible to most ordinary people. Doesn't this sound a bit like the Dutch tulip mania?
  • Speculation-Driven: Many people rushed into the NFT market not because they particularly liked a digital artwork, but because they thought, 'Buy now, double your money next week.' When a market is filled with speculators rather than genuine enthusiasts, a bubble inflates.
  • Ephemeral 'Value': A house provides shelter, and a company's stock represents its earning potential. But what is the value of a JPG avatar? To a large extent, it's 'consensus'—meaning it's valuable only if people believe it is. Once people decide it's worthless, its price can collapse instantly. This value foundation is extremely fragile.
  • Celebrity Effect and FOMO (Fear Of Missing Out): When celebrities or influencers shill a project, countless fans blindly jump in. Media reports about 'someone achieving financial freedom through NFTs' further create anxiety that 'it's too late if I don't get in now,' leading more people to hastily invest their money, further inflating the bubble.

3. The Bubble Will Burst, But the Technology Has a Future

At this point, you might think NFTs are a complete scam. But it's not that simple.

We can look back at the dot-com bubble of 2000.

Back then, as long as a company's name included '.com,' its stock price could skyrocket, regardless of what the company sold, and many companies weren't even profitable. When the bubble burst, countless internet companies collapsed, and investors lost everything.

But, did the internet disappear? No.

On the contrary, after the bubble deflated, truly valuable companies (like Amazon and Google) survived and profoundly changed our world. Internet technology itself holds immense value.

NFTs are similar.

  • The Bubble Part: This refers to the JPG avatars and so-called 'digital artworks' that were hyped to astronomical prices with no practical use. This part of the bubble has actually been bursting over the past year or two, with many NFT prices plummeting by over 90%.
  • The Future Part: This is the 'digital ownership' technology behind NFTs. This technology could be used in many areas in the future, such as:
    • Game Items: Game skins and equipment you buy could truly belong to you. You could use them across different games (if developers allow) or sell them to other players.
    • Tickets: Concert or sports event tickets could be issued as NFTs, eliminating fake tickets and curbing scalping.
    • Identity Proof: Diplomas, property deeds, contracts, etc., could be recorded as NFTs for anti-counterfeiting, convenience, and permanent storage.
    • Membership Cards: Serving as credentials for entering a club or accessing certain services.

Conclusion

So, back to your question: Are NFTs the next bubble?

  • For those overhyped 'image' assets, it was a bubble, and a significant portion of that bubble has already burst. If you're still hoping to get rich overnight by buying a picture avatar, you'll most likely end up as a 'sucker' holding the bag.
  • However, for NFT as a technology, it is not a bubble; it represents a future. Just as the internet itself became more valuable after the dot-com bubble burst.

My advice for the average person is: Treat it as a high-risk speculative asset, not a stable investment. If you're genuinely interested in a project, it's fine to invest a small amount you can afford to lose just to 'play around,' but never bet your life savings on it. Wait until the technology matures and applications truly integrated into our lives emerge; it won't be too late to participate then.

Created At: 09-11 03:40:26Updated At: 09-11 04:43:35