Are NFTs dead? An Investigation
After the euphoria of 2021, last year proved to be a massive disappointment, with many new to crypto losing large amounts of money. One sector that felt the chill of the crypto winter was NFTs - from the highs of 2021, the NFT market cap currently stands at $10.5 billion, leaving many to ask – are NFTs dead?
As a quick recap, an NFT is a digital certificate of authenticity that can represent ownership. However, for now, most NFTs are created to represent digital media, be it artwork, music, or 3D images. In the future, NFT use can extend to contracts, ticketing - in fact, any real-world product or event where digital ownership is needed.
Reasons to be optimistic
As I mentioned above, the value of the NFT market today is some $10.5 billion and counts for 1.03% of the total cryptocurrency market cap. A large sum by anyone's reckoning.
Some people see the picture rather differently. They believe that the end is near due to the massive decrease in NFT trades from the highs of January 2022.
So other than market value, what are the reasons for us to feel optimistic about the future of the NFT? There are many, but let's take a look at five of the strongest reasons to be cheerful ~ Inflation caused worldwide markets to dump, not just NFT The fallout from two years of the COVID-19 pandemic was almost inevitable. The response to unlimited currency printing resulted in a real-time fall in the value of goods and services, aka inflation.
This insidious metric has risen in every corner of society, from stocks to commodities to everyday goods, resulting in higher prices across the board. However, all is not lost. The US and the UK have recently recorded drops in the inflation rate, with further falls expected as we progress through the year. This is encouraging for anyone looking to invest a little spare cash into crypto and NFTs.
Many major brands looking to launch NFT
Many mainstream brands such as Budweiser, Gucci, and Nike have launched or are planning to launch NFT collections soon. NFTs and the Metaverse go hand in hand - Nike fans will be able to purchase a pair of digital sneakers for $50. Nike's platform is built on Polygon. To interact, users simply have to set up a digital wallet and load it with either ETH or MATIC crypto.
Bored Apes still trending – partnership
Despite the massive drop off from the highs of 2021, one of the most talked about NFT collections – the Bored Ape Yacht Club – is still proving popular with its legions of fans. At its height, one BAYC digital artwork sold for $3.6 million, with another going for $1.7 million. Recent data from Google has shown that searches for BAYC are increasing. In what is certainly a nod to the future of the NFT, a self-described BAYC whale just parted with $900k to buy 69 DeGods NFTs.
Elon Musk and Twitter
Unless you live under a rock, you will be aware that famed entrepreneur Elon Musk finally put pen to paper and purchased the social media platform Twitter. Musk makes no secret of his love of all things crypto, especially given his close association with DOGE coin. If, as many suspect, he makes DOGE the native currency of Twitter, this is expected to provide a huge boost for the legitimacy and, indeed, use of crypto. In perhaps a sign of things to come, NFT Twitter fans can now display their digital art as part of their profile picture.
As mentioned above, NFTs are closely related to the Metaverse in the form of digital items users can create, trade, and use on their whim. The future of gaming is virtual, as what we know of as video games changes at a rapid pace. The rise of the mobile Play to Earn gaming concept has seen significant growth in the Far East, allowing players to create and trade their precious digital items. While this has not entirely caught on in the West, many industry experts believe an integrated commercial environment that allows players to trade and earn via NFTs is not from being a common reality.
There are many reasons to be upbeat about the future of the NFT.
However, as I mentioned above, apart from digital artwork, there is a real need for NFT use cases in wider society. This is mainly due to their ability to determine a unique and non-transferable (non-fungible) good or service. It must be remembered that no NFT can be traded on a like-for-like basis (unlike traditional crypto). This ability to uniquely identify without being copied, substituted, or sub-divided brings value to an NFT.
The concept behind the NFT is relatively simple. This digital certificate then exists on a blockchain which can be accessed and viewed by anyone, thus proving ownership, digital or otherwise.
NFTs have the ability to revolutionise a wide variety of traditional industries radically, none more so than real estate. As we are all probably aware, the house purchase process in the UK is far from ideal, with endless documentation and last-minute gazumping a common reality.
Now imagine a future where buyers and sellers agree a price and use a third-party escrow account to manage the purchase. Once complete, the deeds to the property are transferred in the form of an NFT, which exists on an immutable blockchain. This is a great example of how distributed ledger technology will directly impact the fabric of our future lives. With estimates of a $230 billion market valuation by 2030, there has never been a better time to consider investing in NFTs.
Author: Brendan Beeken
Moni Talks Founder and Chairman Brendan Beeken is an entrepreneur, commercial strategist, investor, and philanthropist. He writes on a wide range of subjects, including cryptocurrency, decentralised finance, blockchain, business advice, and professional wellbeing, for news and business websites, as well as Latest Moni and his personal site, brendanbeeken.com. Brendan draws from his own research and more than two decades of personal experience in business to offer a unique insight, perspective, and commentary on diverse subjects. He is passionate about making the cryptocurrency space more accessible and encouraging safer and more responsible trading and investing. Brendan's LinkTree is https://linktr.ee/brendanbeeken.