NFTs
NFTs are not dead yet, but have merely evolved despite the dismal metrics of recent months ⋆ ZyCrypto
After a bright start to life in 2021, the hype around non-fungible tokens (NFTs) has waned, sparking a wave of speculation that the asset class has seen its death knell.
While a significant portion of the investing public clings to the notion that NFTs are dead, executives building on digital collectibles argue that the ecosystem is merely undergoing a correction. The dismal price floor is being interpreted as a growing problem for NFTs, signaling a much-needed evolution for the asset class.
RECRD video platform founder Anoir Houmou argues that NFTs are just evolving beyond the hype and buzz that characterized them in 2021 into an era of real-world application and sustainability.
“Recent trends indicate a maturation of the market after the explosive growth witnessed in recent years,” Houmou said. “We are moving towards a phase where the focus is on sustainability, real-world utility and integration into broader technology ecosystems.”
Houmou argues that the ecosystem is ripe for a new wave of institutional investors, tailored to practical solutions with real-world public services. For him, the main practical use cases for digital collectibles include giving holders access rights to events, subscription use cases, environmental sustainability projects, and public services revolving around retail, fashion, and education.
Other experts are pitching their tents with NFTs citing a integration technology with Bitcoin (BTC) blockchain via Ordinals. Since its launch, sales of Ordinals have soared to $675 million despite falling metrics around other digital collectibles, with experts pointing to a new era for NFTs.
“With Bitcoin-based NFTs recently recording sales volumes of $148 million and Bitcoin positioning itself as one of the top three blockchain networks for NFT sales, this signifies strong NFT sentiment,” said Oh Thongsrinoon, CMO of the company Web 3 Altava.
When faced with the issue of falling price floors, NFT executives rationalize the trend as a simple market correction common in the lifecycle of every emerging asset.
“NFTs are evolving beyond collectibles into tools of digital ownership and utility,” said SNPIT founder Toshiuki Otsuka. “Market corrections are normal and signal maturation.”
The Shadowy Figures Surrounding Digital Collectibles
In 2021, NFT sales totaled a staggering $18 billion, driven by collectibles like Bored Ape Yacht Club and CryptoPunks and the impressive US$69 million purchase of Beeple’s digital art.
As 2022 progressed, enthusiasm for the asset class began to wane with the numbers painting an even bleaker picture in 2023 and 2024. In the first quarter of 2024, NFT sales stood at $4.1 billion, but in the second quarter, the number dropped 45%, trading at $2.9 billion , which represents a pessimistic scenario for the broader ecosystem.
Analysts are rationalizing the recent monthly decline in digital collectibles with BTC’s recent lackluster performance in recent weeks. Despite the overall faltering outlook, NFT sales across Solana, BTC, and Ronin are still on the rise, giving enthusiasts some hope for better days ahead.