LIs the NFT market collapsing? Over the last few weeks, an increasing number of buyers have realized that their investments are not as valuable as they originally hoped. A concrete example of this uncertainty.
Sold for $ 3 million in March 2021, the NFT for the first tweet in history does not exceed $ 10,000 today, or 300 times less than its starting value. Let us first remember that an NFT is a digital token that authenticates and tracks the value of an item on the internet including artwork, collectibles or even playing cards and even virtual land packages. Celebrities, artists, technology gurus, all are won by these NFTs. Snoop Dogg,
Eminem, Elon Musk, Kate Moss, to name a few examples. “We went from 14.04 million sales in the fourth quarter of 2021 to a transaction volume of only 7.44 million in the first three months of 2022. A decrease of 46.8%”, indicates NonFungible. com. The same observation can be made on the number of active wallets, a decrease of 25% over a quarter to 14.04 million. According to the NFT market data website, the total volume of NFT trading in the first quarter of this year was $ 7.8 billion compared to $ 8.3 billion in the fourth quarter of 2021, a decrease of 6% between the two periods. While the future remains open to speculation, there are four possible scenarios that the NFT market may experience in the next few years.
The market is consolidating
Chainalysis’ latest studies, like most other specialized platforms, make it possible to better capture the market trend. In fact, mainstream investors were quick to reject cryptocurrencies and NFTs when they first appeared. But the reality is quite different. These non-fungible tokens are skyrocketing. Average prices have risen markedly through 2021, triggering a wave of interest in these uniquely identifiable digital assets. Buyers are often speculators and think that if they come in early, they will sell for more in the future. On the example of “Meg”, the most popular NFT at present with a market value of over $ 91 million. Therefore, it has a good chance of becoming an established part of the investment world.
A solid component of Metaverset
Since NFTs are typically associated with websites and transactions made through web browsers, and Metaverse is primarily VR-based, there may be some confusion about their common features. Fortunately, despite the relative novelty of both concepts, several companies have already found creative and successful ways to use them simultaneously. If the market currently allows the purchase of photos, videos and various digital assets, it will in the near future allow the purchase of real estate and shares.
Video games take over There has been much speculation about the video game industry’s response to NFTs. Some companies already offer digital assets as part of blockchain gaming, but that has not yet taken off in the wider gaming community. Some experts ask what would happen if this happened. Games are a huge market and digital assets like NFTs could fit perfectly into this virtual world by allowing players to purchase unique assets in the game via “Game assets”. But for some people, it can blur the boundaries between gambling for fun and gambling for profit.
Some experts are still skeptical about the future of NFT and believe that any bubble will eventually burst. The current frenzy has led to JPEGs being sold for millions of dollars with artists and new investors, but unlike physical artwork, it is still easy for others to make credible copies, which may make it less valuable in the future because it is much easier to make an exact copy of a digital photo than a Picasso painting. Fortunately, much seems to be moving away from this scenario, and despite what critics say, the NFT continues to grow.