The weekly sales volume of Non-Fungible Tokens has significantly increased from 100 sales in 2017 to an estimated 15,000 or even 50,000 by 2022. You may have heard rumblings about Non-Fungible Tokens (NFTs) recently, and the hype around this technology this year was truly remarkable. Do you remember the wild buying of Bored Appes for tens of thousands of dollars or the tales of those who got rich from buying low-cost NFTs?
However, people, who were investing heavily in NFTs these years, suddenly suffered major losses in NFTs value at the end of 2022. Q3 NFT sales dropped significantly, seeing a 60% decrease compared to the previous quarter. At the beginning of this year, Justin Bieber made headlines for purchasing an NFT from the BAYC collection for 500 ETH, which was around $1.3 million at the time. Later, his investment quickly devalued, with the USD value of his NFT dropping by more than 94%!
Big companies are still trying to close their eyes on the NFT drop and push their Non-Fungible Tokens further. Porsche and BMW are releasing their first NFTs, and Starbucks is announcing its NFT loyalty program, while their customers have growing doubts.
Do you remember at the beginning of the metaverse and NFT hype, different experts were saying it's an overhyped bubble? It seems that now they are giggling and rubbing their hands while reading the latest news. So, were they actually right, and will NFTs be graved in 2023? The short answer is no.
However, there is a sip of the truth in their words. Due to the swift NFT market decline, it calls into question whether or not this technology can indeed revolutionize the digital world. Or is it used correctly?
This could be a result of a few different factors. One key element could be the high benefits associated with NFTs, which could have attracted investors in an attempt to make quick profits.
A further issue could be the fact that many of the sales going through the NFT market are one-off transactions, which do not create sustainable growth.
The lack of a secondary market is another major issue contributing to the NFT market's downfall. A secondary market could provide liquidity, meaning that a seller could turn their NFT into cash easier. This is uncommon in the NFT market, which keeps prices stagnant and makes it difficult for sellers to make money.
Additionally, the lack of a viable market for NFTs leaves investors unable to assess their asset's value.
The growth of the NFT market has also been attributed to the rise of DeFi tokens. DeFi tokens are taking the spotlight away from NFTs as investors and speculators shift their focus from one asset class to another. This has slowed the growth of NFTs, as investors are quickly moving their money into other investments, like generative AI.
Lastly, recent regulatory decisions have had an impact on the NFT market. Several countries, including China, have begun to issue warnings about the risks associated with NFTs. This has led to some investors losing confidence in the market further.
That is why the attempts of the companies to invest in the NFT look like treading water.
Will NFTs, as they are now, recover, or will they be forgotten - we shall see. Perhaps, we will be more mindful of NFT applications and their value than in the past.
Nevertheless, the decline or change of the NFT does not mean the fall of the metaverse and other Web3 elements.
It is unlikely that the failure of NFTs would significantly impact the overall development of Web3 technologies and the metaverse.
NFTs are a type of digital asset that are unique and cannot be exchanged for other assets on a one-to-one basis. They are often used to represent digital art, collectibles, and other types of digital assets and have gained popularity in recent years. While the market for NFTs has grown rapidly, it is still a relatively small part of the overall Web3 ecosystem and the metaverse.
The metaverse is a virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet. It is an emerging concept that encompasses a wide range of technologies and applications, including virtual reality (VR), augmented reality (AR), and other types of immersive digital experiences. The development of the metaverse is being driven by a number of different technologies and trends, including the growth of Web3 technologies and the increasing popularity of immersive digital experiences.
In conclusion, while the success or failure of NFTs may have some impact on the Web3 ecosystem and the metaverse, it is unlikely to significantly impact the overall development of these technologies and trends.