NFT Market Under Scrutiny: Are They Dead or Evolving Towards Commercial Viability?
Summary:
Despite frequent proclamations of Bitcoin's demise, the cryptocurrency remains strong. However, the blockchain industry's focus has now shifted to criticise the Non-Fungible Token (NFT) market. Although NFT trading volumes have significantly decreased, proponents argue that potential growth opportunities remain for those willing to navigate the market. Several new collaborations and patent applications indicate a promising future for more sophisticated and commercially viable NFT projects.
Reports stating Bitcoin's impending demise have long made rounds yet have completely missed the bullseye, particularly in the current crypto weather marked by its relative popularity and resilience. The recent relative stability of Bitcoin, hovering around the $28,000 mark, and the rising prospects of a spot Bitcoin ETF, it may not seem like Ethereum, another key player in the space, is nearing doom's door as well. However, it appears that the commentators within the blockchain sector have zeroed in on a new subject of scrutiny: the nonfungible token (NFT) market, which is now being labelled as hovering close to mortality's door.
NFTs as per the vocal consensus are considered to be dead and non-operational. Adding fuel to the fire is a recent Rolling Stone headline that marks the worthlessness of NFTs, a statement that is generally accepted given their lack of intrinsic value. Similar to the obsolete ICO tokens of the 2017 bull market or the countless DeFi protocols post the 2020 DeFi summer, NFTs also lack the required entry barrier to create significant monetary ripples. While the process to launch an NFT project remains simple, attracting traders and investors alike, it entirely relies on market demand and supply, both of which are not necessarily indicative of its qualitative robustness.
The trading volumes of NFTs have seen a significant dip from striking a billion a week, during the middle of 2021 to early 2022, to hardly reaching the $100 million mark today. Despite what appears to be a bleak scenario, potential growth opportunities exist within the market, for those willing to brave the ‘NFTs are dead’ narrative.
PayPal's patent application in September for an NFT purchase and transfer system and Pudgy Penguins' US footprint in physical toys sold via Amazon and Walmart are good markers of such avenues. Collaborations of Doodles with footwear brand Crocs and Gary Vee’s Veefriends with Reebok, Justin Bieber teaming up with a blockchain music platform to convert songs to NFTs with royalty streams for NFT holders, and top auction houses bringing mainstream artists into the NFT world are some of the signals that paint a picture of a market that is far from dead.
The key takeaway is the potential that blockchain and NFTs possess, which lies in constant evolution and weeding out of weak hands, scams, and other transient elements. Ahead, more sophisticated and commercially competent NFT projects are anticipated to turn this "NFT winter" into a promising spring.
The author Tama Churchouse is COO of Cumberland Labs and a founder of Digitali and his views may not necessarily represent the views of Cointelegraph.
Published At
10/12/2023 10:57:05 PM
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