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NFT Market is Slowing Down But It Is Here to Stay

NFT Market is Slowing Down But It Is Here to Stay
  • NFT revolutionizing the world of digital art.
  • The emerging business of gaming embraces NFT.

Earlier this year non-fungible tokens (NFTs) were everywhere. They were revolutionizing the art world with digital art such as online pictures, videos, even tweets, and gifs. NFTs are unique digital assets that cannot be replicated and that way guarantee someone has ownership of a specific virtual item.

Initial NFT Frenzy

Digital artist Beeple sold an NFTs for a small fortune of $69 million at a Christie’s auction. Although that was the record in price, others also made some big bucks. The CEO of Twitter, Jack Dorsey sold his first tweet that same month for $2.9 million.

In more recent news, a billionaire bought a rare digital avatar known as a CryptoPunk at Sotheby’s for over $11.7 million. Still, new data shows sales dropped from a seven-day peak of $176 million on May 9 to just $8.7 million on June 15. The numbers are back to where they were at the start of 2021.

There is no question that this will affect the whole market, and prices of popular NFTs are already falling. The popular NFT project CryptoPunks dropped to a weekly average of t$50,840 at the start of June compared to $99,720 in early May. Similarly, SuperRare digital art prices have fallen on average from a record of $31,778 to $5,342.

Slowing Growth But No Reasons to Worry

Gauthier Zuppinger, chief operating officer of non-fungible believes that one of the main reasons for the NFT price decline was a sudden rise and fall in sales of MeeBits, new crypto collectible items made by CryptoPUnk creators. He explained that every time a quick increase is noticed on any trend, a relative decrease is inevitable, and that stabilizes the market.

Geoff Osler, CEO of NFT app S!NG, thinks that the steep prices of digital collectibles were influenced by pent-up demand from wealth accumulated from rising cryptocurrency prices. The market seems to be cooling down. Bitcoin has also fallen from a record high of nearly $65,000 in April to roughly $39,000 as of Monday.

NFT advocates claim there is no reason to worry. Nadya Ivanova, chief operating officer of L’Atelier, a research firm affiliated with BNP Paribas explained that high-profile NFTs selling for millions of dollars was a sure sign that the market treated them as speculative assets. And speculative assets are unstable and liable to dry up.

“The bigger question for NFTs is their long-term value, which we believe is likely significant,” Ivanova added. “As augmented and virtual reality technology matures, normal people are going to spend more and more of their time — and therefore money — in virtual environments.”

Therefore a role for NFTs in the development of immersive virtual worlds exists. The music industry is also welcoming NFTs, with artists such as Kings of Leon and Steven Aoki releasing albums as NFTs. However, copyright issues must be settled, since artists and content creators have complained their work is being stolen and sold as NFTs.

The Future?

Radosław Zagórowicz, CEO and co-founder of Hoard Exchange, sees the emerging business sector of gaming as one of the fields where NFTs can prove to be very useful.

“Arts or in-game items are obvious examples where NFTs can be used but they can also be used as individual/unique investment portfolios consisting of many different defi related tokens,” he said.

Hoard Marketplace allows users to trade, buy, sell, loan, or rent non-fungible tokens (NFTs), like in-game items, digital art, and domain names. Hoard promises true ownership since the main focus is to create a space for game developers to tokenize their games on a blockchain while allowing gamers to own items they paid for.

The native token of the platform is HRD, and the current version supports loans in five ERC20 tokens: HRD, DAI, USDT, USDC, and BUSD.

NFTs like CryptoKitties, Axie Infinity, Rarible, Superrar were introduced to the platform. Hoard’s MVP stage offers three user personas – Lender, Borrower & Staker. Borrowers can use NFTs as collateral to apply for a loan.

Zagórowicz claims these are just the first steps of further developing NFT utilities and protecting true ownership of virtual content. It seems that they are all on the same page when saying NFTs are not going anywhere.

Summary

Although there is a notable slowdown in the NFT marketplace growth, industry experts believe there is nothing to worry about as NFTs are here to stay following an explosion in popularity in recent months.

One of the sectors where NFTs may prove to be very useful and popular is the entertainment industry. As the entertainment industry has proved to be a leading force behind a recovery in the US labor market, its force can also push NFTs to become a widely accepted tool for converting audio and video material into non-fungible tokens.

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A dedicated market analyst focused on the highs and lows of the cryptocurrency market. With a background in Business Administration, he tries to unfold his financial perspective to global readers.