Franklin Templeton Recognizes Bitcoin's Dominance in NFT Sector while Highlighting Investment Risks
Summary:
Franklin Templeton Digital Assets has released a note discussing Bitcoin-based NFTs' impact and the role of Bitcoin Ordinals protocol in driving innovation within Bitcoin. While acknowledging the rise of Bitcoin in the NFT space and popularity of Bitcoin Ordinals collections, the asset manager also warned investors about the potential risks, including a fall in value and lack of banking guarantees. The firm has previously introduced its investors to various crypto segments, demonstrating its active engagement in the cryptocurrency landscape.
Franklin Templeton Digital Assets, the asset management giant's division for cryptocurrencies, has released a notice to its investors to discuss the impact of Bitcoin-based nonfungible tokens (NFTs). The note emphasized the role of the Bitcoin Ordinals protocol in encouraging a flurry of innovation within the Bitcoin realm. The company attributed an upsurge of activity around Bitcoin in the last year specifically to Ordinals. According to Franklin Templeton, fresh token criteria like BRC-20 and Runes, as well as Bitcoin-based layer-2 grids and Bitcoin's decentralized finance (DeFi) fundamentals, have been instrumental in promoting innovation in the Bitcoin world.
They also acknowledged a hastening pace of activities in the Bitcoin NFT sector. The increasing dominance of Bitcoin in the expansive NFT landscape was pointed out by the asset management firm. Commenting on this intensified activity, the firm noted, "since December 2023, Bitcoin Ordinals have enjoyed a significant rise in trading volume, clearly showcasing Bitcoin’s dominance over ETH in trading volume.” Furthermore, it spotlighted several Bitcoin Ordinals collections like NodeMonkes, Runestone, Bitcoin Puppets, Ordinal Maxi Biz, and Bitmap, which have begun overshadowing competition in terms of marketing capitalization and trading volume in the NFT space.
However, despite their optimism about Ordinals, Franklin Templeton also issued a warning stating that these assets could depreciate in value and do not carry any banking guarantees. They aren't insured by the Federal Deposit Insurance Corporation (FDIC) either. The firm cautioned its investors about the inherent risks of all investments, including potentially losing capital. It further highlighted that digital assets are especially subject to risks given the nascent nature of the technology and its inherent vulnerabilities.
The organization has been continually updating its investors about the various segments in the cryptocurrency sector. In a note to investors released on March 14, they discussed memecoins, acknowledging their potential for fast profits but refuting any inherent value. Franklin Templeton, earlier this year, was among the organizations launching a spot Bitcoin exchange-traded fund (ETF) in the US and is participating actively for a spot Ether ETF. On February 12, they filed an S-1 with the US Securities and Exchange Commission (SEC).
Published At
4/4/2024 10:50:37 AM
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