The Milady non-fungible token (NFT) collection recently spiked in popularity and value, receiving acknowledgement from renowned entrepreneur and owner of Twitter, Elon Musk. Comparisons have been drawn with Musk's similar treatment of Dogecoin (DOGE), where the token soared in value in response to his tweets. The Milady tokens consist of 9,823 childlike faces and the sudden spike caused prices to quickly surge to a peak of $13,700 worth of ether (ETH) per NFT. This influx of activity rapidly increased trading volumes to over 12,000 ether, worth over $22 million in the span of 24 hours.

Musk has been referred to as having "The Elon Effect" in the past, often seen in the short-term jumps of tokens he mentions. In May of 2021, Dogecoin (DOGE) seemed to benefit from Musk's support, jumping 22% minutes after he tweeted about the developers of the coin. Come December 2021, dogecoin saw a massive 33% increase after Tesla (TSLA) announced it would accept the token as payment for transportation merchandise.

However, this growth can be observed as a spike, followed by a gradual sell-off in the days afterwards which makes it difficult to judge whether there is any real potential or growth affiliated with certain tokens. The same could be said for Milady NFTs, where prices have already come back down 7% since its peak due to the high volumes. This could be seen as the initial evidence of a sell-off in the days to come.

In order to determine whether the Milady NFT spike or any other token backed by Musk is an indication of reliable growth, a realistic approach should be taken in terms of weighing the short-term gains versus the long-term effects. Investors should also be aware that just as adding speculation in a token can cause prices to jump, selling heavy amounts of a token can quickly send prices back down.



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