NFTs
NFTs are retaining value, researchers say
Visitors observe Non-Fungible Token (NFT) works at an exhibition titled Indo NFT Festiverse at the… [+] RJ Katamsi Gallery, Indonesian University of Art combining art and technology in Yogyakarta on April 13, 2022. – (Photo by DEVI RAHMAN/AFP)
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If you listen to the headlines, the non-fungible token market seems like a flash in the pan. The asset class peaked at $21 billion in May 2022 before crashing back to Earth. Over 95% of NFTs created in the 2021-2022 NFT craze are now worthless, according to researchers dappGambl.
However, upon closer inspection, the image looks a little different. NFT market cap today is robust US$10 billion, driven by the 5% of NFTs that maintained their value. The top ten artists’ collections are worth a total of $2.5 billion, having retained 73% of their value from a year ago.
Top 10 NFT Artist Market Values, Year Over Year Change
https://app.nftavaliações.com/
Compare this with modern art sales, which last year amounted to $3.1 billion, 67% of their all-time high. Over the past decade, total sales have fallen by 12% in 2022, 31% in 2022, 31% in 2019 and a staggering 43% in 2016. This type of volatility is a feature of the broader art market, which is sensitive to price swings. . the wealth of high net worth individuals. Sales often drop precipitously one year only to rebound the next, like the stock market.
Modern Art Sales 2013 – 2022
Art Basel and UBS Art Market Report 2023
The reality is that, despite the current reduction in market value, NFTs continue to quickly take their place in the art industry. Headline sales continue, as CryptoPunk 5066which recently sold for $1.5 million. Sotheby’s It is Christie’s built teams specializing in digital assets and hosted NFT sales. Meanwhile, many museums are acquiring NFTs in their permanent collections, including the Pompidou, LACMAIt is MoMa. AIC Miami displayed CryptoPunk #305 alongside Andy Warhol’s Kay Fortson (an American lady).
Perhaps the best measure of the durability of the NFT market comes from the art-backed loan market.
Outstanding loans secured by traditional art totaled between US$27 and US$31 billion in 2021. Private banks such as Goldman Sachs and Morgan Stanley
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, auction houses such as Sotheby’s and specialist companies such as Borro and Athena offer loans. Lenders typically offer up to 60% of fair market value and charge interest rates of 6 to 10%, according to Deloitte. These are multi-year loans, which implies that lenders are confident that the art will maintain its value over time.
The NFT lending market reflects these terms. Loans against top NFT collections are available for up to 75% of fair market value with interest rates of 8% to 10%, as listed at Gondi.xyz. Most importantly, durations are extending, implying that investors are betting that the NFT’s value will endure. Last week, investors extended a three-year NFT-backed loan on a Chromie Squiggle, the longest loan on record.
Instead of disappearing, the NFT debate “has shifted to the long-term impact of blockchain applications on the art market,” according to the annual report Art Basel and UBS art market report.
The NFT market has fallen substantially since its peak in 2022, but the bottom appears to have passed. Recent sales indicate that the market is stabilizing, with works by top artists consolidating a value in the billions. This dynamic is common in new markets, such as the dot-com boom of the 1990s and the initial cryptocurrency offerings craze of 2017. While most participants disappear, the highest quality projects survive and flourish. The NFT market is following a similar path. Serious artists continue to produce thoughtful NFTs as the medium solidifies its place in the global art market. As this trend continues, general interest in NFTs is expected to grow.