Despite falling sales volume, NFTs have a bright future; Here are the reasons
NFTs became a major topic of discussion in 2021 and the trend remained the same until May 2022. People who believed in cryptocurrency also promoted NFTs a lot. In March 2021 when Beeple’s NFT was sold at $69 million, people seriously started thinking of NFTs investment as a quick way to grow money. Unfortunately, this trend didn’t last long and people started losing interest in NFTs. Web3 promoters still believe that NFT will bounce back. Even if the NFT sales are falling, NFTs still have potential. So, I decided to look at NFT market history and numbers to understand if NFT is really the future of art as it was being portrayed.
NFTs (non-fungible tokens) are unique tokens stored on a blockchain. These tokens are associated with digital content. The digital content could be a photo, video, music, or any other digital artwork. Most NFT marketplaces use the Ethereum blockchain but some also reply on Polygon and the Binance smart chain. Now if I simplify, NFTs are the certificates of ownership for digital artwork.
It is believed that NFTs can help artists make more money and fund their projects. This is the reason several celebrities, sports persons, musicians, and creators launched their collection of NFTs.
Most people buy NFTs as an investment. There are several success stories to back this claim. Bored Ape Yacht Club NFTs were launched in April 2021 at .08 ETH ($190) each. In just 5 months, one of the NFTs from this collection was sold for 769 ETH ($2.3 million). Can you imagine the return on investment?
Also see: Best NFT marketplaces
Very few NFTs could offer this kind of return but you only have a chance if you invest. Some people even lost a big amount after investing in NFTs. The person who invested $2.9 million in the NFT of Jack Dorsey’s tweet didn’t even manage to get $10000 for this NFT. Now calculate the loss here. This shows that NFT is actually a risky investment that can give you a big profit or a big loss.
NFT purchases are done with crypto. After the crypto market started going down each day, people started losing the value of their NFTs. Some people saw this as an opportunity to invest in more NFTs, but most people kept themselves away. This is the reason NFT sales is down in recent months.
I recently found a few reports on NFT market prediction. The report from Grand View Research predictions that the NFT market will reach $200 billion in 2030. The current market value is little more than $15 billion. Verified Market Research predicts that the NFT market could reach $231 billion by 2030.
You may be wondering why research companies are betting big on NFTs at a time when people are losing interest in it. I suggest you see the bigger picture of NFTs. Most people see NFTs as investment opportunities, NFTs are more than just an investment option. This is the reason every report predicts a big NFT market in the new future.
NFT will play an important role in Metaverse, the virtual digital world most companies are working on. NFTs can represent tokenized versions or real-world assets such as buildings. It means NFTs can represent ownership in the metaverse. It could be ownership of avatars, buildings, real estate, in-game assets, and more. NFTs can also be used in medical records verifications, intellectual property & patents, academic credentials, supply chain, and ticketing.
Social media apps including Facebook, Twitter, Instagram, and Reddit are integrating NFTs. Spotify is also launching NFT galleries on artist pages. These things are being added to help creators and social media celebrities earn extra income using NFTs.
NFT games are also becoming popular. Players earn tokens with play-to-earn models and they can also sell their in-game NFTs to other players. CryptoKitties is a popular NFT-based game you should check if you are interested in NFTs.
NFTs have the potential to disrupt the Music, Art, and Gaming industries. It will ensure the artist or creator is compensated for their work. NFTs can also be used to represent ownership of physical assets. If this becomes reality, it can be used to represent ownership of cars, houses, or properties.
The NFT market is still maturing and we will see a lot of changes in NFT trends. I have already explained how NFTs can be used for several things. These use cases are the reason why we believe that NFTs have a bright future. If you also see NFTs as more than just an investment option, you will surely realize the potential of NFTs.