NFTs
Are NFTs Still Viable Investments in 2024?
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Non-fungible tokens (NFTs) — digital assets representing a wide range of tangible and intangible items and are recorded on a blockchain — reached peak hype a few years ago.
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At the time, they attracted huge amounts of money. For example, auction house Christie’s sold digital artist Beeple’s NFT collage for $69.34 million in March 2021. Other major NFT sales in 2021 included a two-lot auction from Bored Ape Yacht Club (BAYC) of Sothesby’s, which netted $26.2 million for 202 NFTs.
Are NFTs Still Viable Investments in 2024?
Following the explosive growth, NFT trading volumes also saw a rapid decline thereafter – dropping a staggering 97% in September 2021 from its record high of $17 billion in January 2022, as per Bloomberg detailed at the time.
Although sales of NFTs have been lagging since then, as Benzinga reported, a huge sale took place in March: the CryptoPunk 3100 sold for 4,500 ETH, or $16 million.
And that, Benzinga noted, could be a harbinger of an NFT renaissance.
“We have certainly seen the NFT market go through a boom and bust cycle with so many investors focused on PFP [profile pictures] collections soaring, crashing and never recovering,” said Anthony Georgiades, general partner at Innovative Capital.
However, Georgiades also noted that several quality collections have flourished and, in turn, shown that they are likely to endure for the foreseeable future.
“After all, people like digital art, so I suspect this aspect of NFTs will continue to show some traction,” he said.
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Less speculative market for NFTs at this time
According to some experts, the apparent resurgence of NFTs this year has less to do with speculative hype and more to do with meaningful real-world applications.
“NFTs are expanding their utility beyond digital art into industries such as gaming, real estate and digital identity, showing their potential for sustainable investment opportunities,” said Lani Dizon, co-founder of Zenza Capital.
Shiti Manghani, CEO of NFT gaming app STEPechoed the above notion, saying that the true value of NFTs lies in their utility.
“If you believe in a specific utility, let that guide you. But pure price speculation is never a good reason,” Manghani added.
According to Dizon, investing in NFTs has several advantages: they have diverse applications, offer proof of ownership and are easy to access through improved platforms.
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However, some of the cons, she added, include volatility, liquidity issues and the legal ambiguity surrounding them.
No full NFT return in sight, some say
On the other hand, some experts do not believe in the full return of NFTs.
“The flood of images with questionable value will not happen again,” said Ilya Stadnik, CEO of Zent.
According to him, NFTs can, in some cases, be a good investment — as long as there is careful selection.
“I could say that 99.9% of them are not worth considering. As I noted previously, the comeback is not happening, but new technologies bring hope for the transformation of the NFT market and greater integration in sectors such as gaming and online entertainment,” he added.
Critics: Not a viable investment
Finally, some experts have never believed in the value of NFTs, arguing that even in their heyday, they were never viable investments in the past – but instead vehicles for speculation.
“Distinguishing between speculation and investment is extremely important. Many speculators in NFTs, GameStop (or other meme stocks) were and are engaged in speculation and not investing,” said Robert R. Johnson, professor of finance at the Heider College of Business, Creighton University. “Speculators can certainly make a lot of money. But they also take a lot of risks.”
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This article originally appeared on GOBankingRates. with: Are NFTs Still Viable Investments in 2024?