Prior to the introduction of Non-Fungible Tokens (NFTs), it was rare for a public picture on the Internet to be worth more than an expensive house or sports car. This is exactly what happened in 2021 when NFTs swept the Internet.
In 2021, the NFT technology was discussed at crypto-events and in news headlines.
The world was abuzz with stories about The Merge collection of NFTs, sold at $91.8m.
A NFT was also sold for an artwork by Michael Winkelmann called Everydays : The First 5000 days. $161 million.
Anthony Azekwo, a Nigerian artist, also had his breakthrough when he sold his digital artwork as NFTs.
In 2022, the NFT meme trend continued with an viral video of Ghanaian pallbearers performing a coffin dance. $1 million,.
The stories sparked interest in NFTs, and although it appeared that the trend would not be ending anytime soon before 2022, the discussions on NFTs ceased.
Dune Analytics In September 2022, it was revealed that NFTs lost 97% their trading volume. They went from $17 billion to $470 millions in January 2022.
NFTs, the innovation that was most discussed in the media, are now almost forgotten. What happened to the NFTs? Are they still alive? This article will examine what happened to NFTs and the prospects for the digital arts future.
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What happened to NFTs
Michael Ugwu is the CEO of FreeMe Digital, an early investor and a believer in NFTs. However, there are some contexts to this death.
According to him, the NFTs seem dead because of the connection between cryptography and NFTs.
The NFTs simply follow the larger crypto cycle.
The performance of NFTs depends on what happens in the cryptocurrency market.
Bitcoin was $69,000 at its all-time highest (ATH) in 2021, when NFTs became the talk of town. In most cases, a bitcoin ATH automatically signals that the cryptomarket is on a bullish run.
The market cap of the crypto industry peaked at $2.9 trillion in 2021, before the FTX collapse of 2022 decimated it.
NFTs also enjoyed a boom. Ugwu invested about $10,000 in NFTs such as CryptoPunks, which have now a price starting at $153,000 and Bored Ape Yacht Club, with an initial price starting at $42,000.
NFTs, unlike crypto assets, are not liquid. In a bear market, NFT trading may be difficult.
Ugwu explains that cryptocurrencies such as bitcoin, ethereum and USDT are always sold, even during a bear market, while selling NFTs is more difficult.
It’s like selling a car.
Global economy and Art SpeculatorS
NFTs are on the same path as cryptocurrency, but their survival is also dependent on the current state of global economies. Patrick McGimpsey, a crypto enthusiast and author, believes that the decline of NFTs is due to the current state of global economies.
He is a Articles Patrick McGimpsey, a Forbes contributor, says that “the NFT Boom coincided with an economic uncertainly, and the Covid-19 Pandemic resulted in increased inflation, higher interest rates, and a tighter monetary policies.”
The NFT market was flooded with those who were looking to profit quickly, and it changed from being a place of appreciation for art to speculating.
NFTs could have declined due to the saturation of the NFT market by substandard projects.
Ugwu’s NFTs are more than just a way to make a quick dollar. Ugwu is the biggest collector of Nigerian NFT art, including that by Azekwoh or Prince Jacon Osinachi.
He discusses the NFTs’ transformational power on Techpoint Africa podcast.
NFTs allowed local artists to gain international recognition for their art, which is something very hard to do.
According to him, NFTs have a similar effect on local music as streaming platforms.
It is difficult to find international buyers in the art market. How do you pay for the work?
NFTs use the blockchain to simplify everything from discovering the art work, all the way through payment. NFTs allow artists to list their works and buyers can pay with cryptocurrency, regardless of where they are located.
Uguwu explains that Osinachi was “probably the very first black artist in history to have an actual auction at Christie’s, the most famous auction house of the UK,”
Like This article According to the explanation, the people are not paying for digital art but rather proof of ownership, which is stored on the Blockchain.
NFTs are coming back.
When people become crypto-rich, NFTs perform well.
Ugwu is saying that NFTs are coming back once the cryptomarket recovers.
Crypto enthusiasts and traders are convinced that the market has entered a bull-run, especially since bitcoin hit a new high of $72,000 on March 20, 2024.
Statista hasn’t seen much NFT activity yet. predicts The market may be worth as much as $2.3 Billion this year and grow by 10% per year until it reaches $3.38 Billion in 2024.
McGimpsey confirms these predictions by examining the state of the marketplace. He says that some of the largest NFT projects, which pioneered digital art sales, still hold most of their original value.
The true value of digital NFTs is not limited to art. The NFTs have the ability to be used in real-world scenarios such as real estate sales and ownership proof.
Artists who missed out on the NFT trend should get their digital canvass and paintbrushes ready.
A tech geek and a Blockchain fanatic, this guy is a real techie. Follow me on Twitter @BoluAbiodun1.