Chinese Investors Resort to NFTs In View of Crypto Crackdown
Investors in China have joined in on the NFT frenzy as they look to profit from the crypto market in light of the recent regulatory measures within the country. Chinese authorities embarked on a crackdown against cryptocurrency adoption, starting with a mining ban that began in May and extended till July. However, investors in the country are not backing down on crypto investments; the emerging innovation of NFT is driving this revolt.
Over the last few months, non-fungible tokens (NFTs) have become a major attraction for crypto investors and digital collectibles enthusiasts around the globe. This pace at which the technology is moving has been likened to a fast-moving train because more than ever, the global crypto community has witnessed an increasing transaction volume on NFT sales.
Alipay Spearheads NFT Adoption with New Marketplace
Driving NFT adoption in China is popular payment service provider, Alipay which debuted in the NFT space by launching a marketplace where Chinese investors could trade collectibles back in July. Alipay’s NFT marketplace runs on a novel blockchain technology managed by the Sichuan Association Copyright Committee (SACC) which is capable of protecting copyrighted authenticity. Just like other marketplaces, Alipay’s NFT marketplace is aimed at giving creators the opportunity to trade the rights to their creations with help of the distributed ledger system.
The reason for the massive shift to NFT investment is their social appeal, as they derive from a wide range of sectors which include art, music, culture. In addition, other industry participants have highlighted their inability to be manipulated, splitted since they are stored on the blockchain. Beyond these, NFTs change the perception of ownership in view of virtual lands and other digital collectibles with closeness to real-life items having significant value.
Chinese Authorities Likely to Regulate NFT Industry, Experts Fear
Indicating mainstream adoption, the trophy of the recently-concluded Euro 2020 was tokenized into 1500 unique versions and distributed among NFT collectors. Alipay had led the auction of the collection through its NFT platform. With the increasing rate of NFT adoption, there are fears that Chinese authorities will continue their active regulatory efforts in a bid to create room for its e-CNY or the digital Yuan to thrive.
The US has also been taking active measures to regulate the crypto space and recently introduced the Infrastructure bill, which has been a subject of controversy among US lawmakers. Still, there have been calls for more crypto regulations, which most crypto proponents in the US have cautioned could stifle crypto innovations in the space.
Generating plenty of sales on NFT marketplaces are animal-themed collectibles like CryptoPunks, Bored Ape Yatch Club, CryptoKitties. Interestingly enough, these NFTs date back to 2017 when NFTs were yet to gain recognition. Meanwhile, global payment service provider Visa recently purchased CryptoPunk for $150k, marking its first entry into the space. Since then, the floor price for CryptoPunks have gone beyond the roofs, settling at a minimum price of $240k per one.
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