The risk and rewards of the NFT market will be considered by the Digital, Culture, Media, and Sport Committee. The investigation will show if there needs more regulation of NFT in the UK. Given that October's sales were less than $500 million, the NFT winter does not appear to end anytime soon.
NFTs, or non-fungible tokens, were once the most publicized concept in the cryptocurrency world, with several companies making millions of dollars from selling these tokens. However, when the situation on the cryptocurrency market deteriorated, the NFT market also suffered and is presently battling to overcome the bearishness.
UK looks into NFT
The UK Parliament said on Friday that an investigation of NFTs will be launched by the Digital, Culture, Media, and Sport (DCMS) Committee. The committee will look at possible hazards and risks that NFTs may represent to markets and investors as well as examine any potential rewards from their activities.
The DCMS demonstrated how overpriced assets may be pushed onto "bigger idiot" investors by using Jack Dorsey's first tweet's NFT as an example. The tweet only received a bid of $280 when it was resold after selling for $2.9 million the first time. The government labeled the NFT speculation a "bubble" as a result of incidents like these.
In response, Julian Knight, a member of parliament and the chair of the DCMS Committee, said:
"Our investigation will look at whether further regulation is necessary to shield individual customers and larger markets from risky investments. This investigation will also assist Parliament in comprehending the possibilities offered by an innovative new technology that has the potential to democratize the buying and selling of assets."
Investors run the danger of purchasing NFTs whose value might vanish at any time, claims Knight. In order to determine if the nation requires tighter NFT rules, an inquiry is required.
NFT markets currently
The UK Parliament is not the only one unconcerned about the value decline since NFT traders also appear to understand this. Recently, NFT sales fell to levels not seen in 16 months after reaching an all-time high of $17.1 billion in January. NFT sales had already been decreasing for the whole year.
The total selling price of all NFTs in October was $491.2 million, or little under $500 million. This demonstrates that the demand for NFTs is falling along with their value. Therefore, inquiries and investigations at this time would only turn investors away, which would cause NFT sales to decline gradually.