The NFT market is unpredictable. Some industry professionals remain pessimistic about the future of NFT and think that any bubble would eventually pop.
Related: NFT pricing strategy: How to price your NFT collection
NFTs may connect data held on blockchains to files that contain other types of media, including images, videos, and audio. In other cases, it may even be connected to tangible objects. These tokens are often bought and sold on niche markets, and the owner of an NFT will frequently have ownership rights over the data, material, or thing related to the token.
The NFT market was swift in 2021, but it hasn’t been very stable afterward, and it appears to have abruptly declined in 2022.
Why NFT Market become so popular in 2021
Two of the most active markets for NFTs in 2021 were the video gaming industry and collectible art initiatives. New game genres, like blockchain-based play-to-earn games that give players in-game advantages, have proliferated because of the advent of NFTs in the video game industry. Currently, users have the chance to become the first owners of in-game assets and perhaps benefit from them by trading them on NFT platforms like OpenSea.
The most well-liked cryptocurrency game overall was Axie Infinity, which utilized both NFTs and its native coin. The NFT market on Axie passed the $1 billion mark in total trading volume. In addition, a report cited by Cointelegraph in March of this year stated that the game would be responsible for two-thirds of blockchain-gaming NFT transactions in 2021.
Due to their enormous popularity, the gaming industry can aid in bringing NFTs to the public. A card strategy racing game called Mixmob’s executive producer, Pavel Bains told Cointelegraph.
“NFTs are a crucial instrument in bitcoin games, and they may even rank among the top three variables affecting the general public’s acceptance of cryptocurrencies. The games themselves are currently our largest obstacle because they aren’t particularly enjoyable to play. Some people will say, “Oh, the onboarding process was awful… A crypto wallet isn’t the best option. I don’t think you need to abstract it away. If it’s pleasurable, children will endure discomfort to acquire what they desire.”
With the enormous success of picture-for-proof collections like the Bored Ape Yacht Club (BAYC) skyrocketing from a mint price of $300 to up to $3.4 million for a rare golden ape, fear of missing out also seems to play a significant role.
There are often two categories of adopters, regardless of what it is: those who recognize a trend’s potential and are prepared to remain with it and those who join in simply because everyone else is. NFTs are the same.
NFT Market performance in 2022
In the first half of 2022, NFT sales continued to be comparatively robust, with crypto users spending $2.7 billion to mint NFTs during that time. Though the year got off to a strong start, there have been some drawbacks for the NFT market.
The floor pricing for BAYC fell below $100,000 earlier this year before rising again, with the least expensive Bored Ape most recently changing hands on OpenSea for 73 Ether ($125,000).
Users also lost their Bored Apes this year because of user error. Fat finger mistakes have resulted in the sale of Bored Apes worth hundreds of thousands of dollars for much less. For instance, on March 28 Ape #835 sold for 115 Dai, and on May 15 Ape #6462 sold for 200 USD Coin.
Ape #6462 was purchased for 200.0 USDC— boredapebot (@boredapebot) May 15, 2022
With a daily volume of $10.29 million as of publication time, the daily NFT market trading volume on OpenSea was down nearly 99% from its peak of $405.75 million on May 1. According to DappRadar, BAYC now only has a daily trading volume of $400,000 for individual collections. As of 7:20 am UTC on October 3, the decentralized application explorer shows that CryptoPunks has no trading volume.
Despite these low numbers, NFTs are nonetheless the subject of considerable attention.
Many people may have observed a sharp rise in the number of people using monkey, bear, or other NFT images as their profile pictures on Twitter and Instagram.
Twitter stated in January 2022 that through Twitter Blue, users would be permitted to use NFTs as their profile images. When an NFT is connected, users of Twitter’s premium, subscription-based edition can connect their wallets and upload a hexagon-shaped profile picture. Meta immediately adopted Twitter’s strategy and added a comparable function for Instagram and Facebook.
Celebrities continue to be involved in the NFT industry; most recently, Snoop Dogg developed virtual marijuana farms in collaboration with the mafia-themed metaverse Mobland.
The Future of NFT
Some industry experts not only believe that the NFT market will endure, but they also believe that it will grow and become an even more significant part of the digital economy. In a report that Cointelegraph reported, it was predicted that the NFT business would be valued at $231 billion by 2030. This is a result of continued usage in the digital collectibles, music, video game, and music sectors. The report demonstrates that the future of NFT is promising.
Our lives will also become increasingly virtual in the years to come, according to experts. It’s feasible that individuals may soon be able to conduct their daily tasks using virtual resources in a virtual environment. Essentially, this denotes the emergence of a metaverse in which everything is transformed into an NFT token. Even while it is unknown how this will cohabit with our physical existence in the “real world,” the revolution is already well underway.
Regarding how the video game industry will react to the introduction of NFTs, there have been a lot of speculative discussions. Even though certain businesses now offer digital assets as part of blockchain games like Ember Sword, this technology has not yet been broadly embraced by the gaming community, leaving many experts unsure of how or even if it will catch on in the larger gaming industry.
Although the future of NFT appears amazing, the reality is edging closer to them every day. The lines separating producers and consumers are blurring, and digital assets increase in value and have reliable theft protection. We will soon learn about the experiments and innovative uses of blockchain, cryptocurrencies, and tokens being made by experts in finance technology, art, and sales.
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Disclaimer: This blog is for educational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.