Bitcoin's price explosion and NFT boom explained - Muneeb Ali
Bitcoin’s price surge over the last year has not primarily been driven by innovations within the blockchain industry; rather, Bitcoin’s own fundamentals drive the price rally, which in turn, lead to more interest in the industry said Muneeb Ali, co-founder of Stacks.
“My working theory on this is that Bitcoin actually leads the crypto industry and within Bitcoin there’s this concept called Bitcoin halvening, where Bitcoin becomes more scarce every four years. Whenever that happens, some sort of market dynamics basically kick in where the price of Bitcoin appreciates,” he said.
While Ali remains bullish on Bitcoin, he warned investors about the risks of volatility.
“It’s a cyclic market. Even 20%, 30% corrections can happen overnight, even up to 80% corrections can happen in a six month to a year timeframe, so I think people should definitely view that as a risky asset, relatively speaking but in many ways, not having any Bitcoin at this point might actually be even more risky,” he said.
On non-fungible tokens, or NTFs, Ali said that they are presenting new ways to own assets.
“Broadly speaking, what NFTs are doing, is they’re bringing the concept of ownership to the internet. If you think about the real world, you can actually own assets. You have a house, you have some a car, and so on, there is strong ownership, in the sense that you know that this thing is yours and only yours. We’ve never had that concept on the internet before,” he said.