The events of the NFT market began to be recognized in 2022 and, if anyone thought that cryptocurrencies were bad, these events were described with mockery and through what are known as non-fungal tokens. And worst of all, nothing in 2023 can make things a little better. So it seems that this is one of the recurring bubbles that appear in the investment sector.
At a very strong birth, with the expenditure of money even on things that could not be achieved, the value of sales of these digital goods has collapsed by 76% by the time of 2022, no less. In this way, the value of transactions reached 638.4 million, more than four times less than a year ago. It is not surprising that companies like Meta (the owner of Facebook and Instagram, among others), have decided to focus on the development of this type of element. Obviously, there is no future in sight.
Some financial information that is wasted
Between the months of April and October, NFT sales saw six months of declines, reaching a low of $460 million at the end. In November, the value of transactions rebounded to 534.2 million dollars. But at the beginning of 2023, clear signs of decline were seen again, which can be found in the market, which is considered to be an investment.
According to figures compiled by the NFTs CryptoSlam data aggregator, the average value of the sale was $144.9 in December 2022 – less than half (62% drop) compared to 384, 4 cents in the same month of 2021. the number of businesses is decreasing, for this period there was a drop of 38%, reaching 4.4 million in the last month. So, what was thought to be an element of art investing for a long time seems to be failing.
What is the reason for this nfts to happen?
The truth is that the idea is not bad in its origin: the NFT is a limited and unique digital object (for example, the first edition of Wikipedia; the first Twitter message in history; quentia; some images, etc.). Therefore, it is not surprising that the breakthrough in the market by the hand of the artist Kevin McCoy with “Quantum”, the first non-fungable record in history, was an explosion due to its popularity.
I’ll admit, though, that the real boom for NFTs didn’t come until years later, when they entered mainstream culture in the form of puppies, like Ape Yacht Club Bored and Pudgy Penguins. And, it must be said, the market began to grow foam and many began to make significant money because of good expectations.
But everything stops, and a slide begins, which seems to have no end. This has already gone to the top of the investor mountains and cools expectations, although there are some big nuggets that explain this drop in value. The first key: NFTs have more applications than digital collection. In other words, the element and element of collecting is lost and therefore its value is not the same as that of the artifact.
Besides, there are many who have thought this way in a certain way right. And through this, as is usually the case with most of these who come and go, this more speculative aspect of NFTs – the collectible one – has gradually deflowered and seen a progressive recapitulation, at the same time as it happens with other markets as established. about cryptocurrencies. A cocktail that proved fatal for non-fungal standards.
Another thing that is important to evaluate is to avoid speculation, which was also a problem with NFTs; and the economic situation has built up the market significantly and quickly, so that the sale is constantly gradable, an ambiguous sign of the bursting of the bubble.
The future of NFTs
Future prospects for NFTs are not very encouraging. Will the value go up again? In terms of collectibles or digital art, everything indicates that they remain in the same way as they exist, for example, a collection of foot pegs, only in digital form. But always, with a fairly tight value and no business, that could represent a significant investment model in the medium or long term. Therefore, it will not be surprising to see that any asset, digital or physical, is signed in the form of NFTs to facilitate the registration and transfer of ownership, but never with the largest businesses.
Finally, those who consider investing in this market should not forget to think very carefully about what they are doing, and also who is the generator of the NFT in question. In addition, there are important questions that should always be kept in mind: How rare or rare are they, what is the launch price and their development? And this is the one that now does not have a great response and companies like Meta deterred (which saw them as a good complement to its Metaverse).
So now there’s a cocktail that’s not going well for NFTs, and while it doesn’t look like they’re going away completely, they’ve given the sun that many people are crazy about investing in them, something that will remain. memory… in a similar way to monetary damages that some people will have to assume.