Is the NFT Market Collapsing, or Does It Still Have a Future?
Recently, the NonFundible company released its Q3 2022 report, leaving many in fear that the NFT market is dying. The Wall Street Journal, together with other media, reported that the NFT market is “flatlining,” down 92 per cent from last September. While some started to pull out their hair, others tried to find peace in experts’ analysis, who stated that it was natural for the interest to drop. So, let’s take a closer look at what’s going on with NFTs and what we might expect in the future.
Is the NFT market collapsing?
The first report by NonFundible in 2022 made everybody think the NFT market is coming to an end as the sale of nonfungible tokens fell to a daily average of about 19,000, which is an impressive 92% decline from a peak in September last year.
Moreover, the number of active wallets in the NFT market fell 88% compared to November 2021.
Many NFT owners discover that their assets are worth far less than they paid for them. And it seems that the people have also lost interest in once-booming NFTs.
According to Google Trends, the number of searches for the NFT term has fallen roughly 80% since January. As the Ukrainian war started in February, the intense focus was on it instead of new digital assets.
But before you start looking for a third part-time job to cover your expenses, let’s see what NFTs might become in the future.
What is the future of NFTs?
Despite the seemingly decreasing popularity of NFTs, the idea is unlikely to leave anytime soon. Currently, the two largest domains for NFT use include collectables and gaming tokens. Despite the decreasing popularity of tokens observed recently, NFT fans and experts still believe there’s room for growth and expansion. Let’s take a closer look.
Decentralised Finance
Since NFTs are unique and carry a specific value, they could become a new financial instrument. Thus, you will be able to invest with NFTs, pay with NFTs, buy tickets in the form of NFTs, etc. Recently, for instance, NFTs have become a valuable tool for donations. One can now donate NFTs that have their value to charity causes. For instance, in the war raging now in Ukraine, people donated NFTs to help Ukrainians. There’re also initiatives like “Digital Art for Real Life”, selling NFTs to support the army. In such cases, people don’t invest in getting profit or expecting returns but intend to do good.
Virtual Reality
With the arrival of digital technologies, our lives are becoming increasingly digitalised. Everything is now transferred to a digital world, including communication, business activities, and memories, especially with virtual reality and the expansion of the metaverse. With a closer intersection between the real and digital world, people would like to transfer their physical belongings like Air Jordans pair into the physical world. And NFTs could serve the purpose.
Entertainment and Arts
Artists are already using the opportunity for direct engagement and support. Turning back to the digitalisation of the world, artists are going at the same pace, transferring their creativity to computers. With NFTs, direct transactions simplify access to artists and allow purchasing their works easier. From painters and motion designers to singers like Shawn Mandes and Snoop Dog, creative people have obtained a new way to monetise their creations. It is also beneficial as long as NFTs allow for owning over a share of the artwork, which makes collective ownership a way out if they’re ready to share ownership and the cost.
Instead of conclusion
The NFT market is still in the early stage of development. Just like with cryptocurrencies, the idea is going through its own ups and downs. Actually, NFT is not so much about investing but about implementing blockchain technology. The issue is that, just like with any innovation, NFTs still need to gain more attention and following. Hopefully, the boat is not sinking as the idea is a great tool to do good, to support others. And who knows, maybe everyone who managed to engage in NFT now will reap the fruits in some time.
