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Billionaire investor and tech entrepreneur Chamath Palihapitiya says that one crypto sector could be in the midst of a classic hype cycle.
In a new All-In podcast, the Social Capital CEO addresses the massive drop off of trading volume in the non-fungible token (NFT) market.
Palihapitiya uses the example of Burning Man and Coachella, two large-scale music festivals that aim to be unique but perhaps end up being mostly the same thing.
The billionaire compares the two music festivals with NFTs and the general art market.
“I do think that there’s this thing – the Burning Man/Coachella example is the best way to describe this. A lot of these things are the same, but when a few people approach something early, they’re too insecure to admit that it’s the same as something else and so they spend a lot of time trying to tell you a narrative about why it’s totally different. The Buffett example would be the quote, ‘Whenever somebody tells you this time is different, it’s probably not that different.’ Or the other quote that’s well-worn in history is, ‘Things don’t necessarily repeat in history but they rhyme.’
All of this is trying to say, other than fundamental leaps in science, there’s not a lot of stuff that’s new in the world. We are repeating things over and over, and one of the things we repeat is the social capital that you get from having certain choices and then getting other people to validate those choices because you want to feel like you’re worthwhile. And this happened in NFTs, and I’m sure in the first phase in different movements in art, that also happened. It’s probably happened in a bunch of other markets as well, so these things are more similar than they are different.
Coachella and Burning man: the same. NFTs and part of the art market: the same. Everybody that runs to you with why it’s so different, I would just have a grain of salt and say, ‘It doesn’t need to be different, you can just enjoy it because you think it’s cool.'”
According to DappRadar, trading volume on leading NFT marketplace OpenSea hit a one-year low earlier last week.