The increasingly crazy NFT market has risen and fallen, but more is rising
Non-fungible tokens are now all the rage in the decentralized asset market, with their prices and — more importantly — the veil of intrinsic value, reduced to progressive expressions of art in the new digital world.
The frenzy in the collectibles market has reached new, unprecedented heights, as sales recorded on OpenSea — the largest NFT trading platform — surpassed the $1.9 billion mark in August. This value is more than 10 times higher than the peak value in March, which was only 148 million US dollars, compared with 8 million US dollars in January, which is a far cry.
Visa also contributed to the volatility in the market and attracted more investors after it acquired Cryptopunk #7610 on August 18th. The collection was worth 49.5 ETH at the time, or roughly $150,000. Among other recent asset purchases that set records are Dmitri Cherniak’s Ringers #879 for $5,077,152, Tyler Hobbs’ Fidenza #313 for $2,820,640, Bored Ape #9361 for $1,410,320, Bored Ape #1734, acquired for $1,184,669, and many other works.
Data on NFT market dynamics varies depending on the methodology applied by vendors, but DappRadar has recorded 32 of the highest NFT sales, all of which have surpassed the $1 million mark in the past 30 days alone.
for the sake of justice
Although the attention of the NFT market Development is focused on their art space segment, NFTs are used in various other industry sectors, including gaming, domain names, digital assets for design programs, sports, and many others. But market forces and rules dictate that application is secondary, and value itself is determined not entirely by inherent applicability, but by external forces capable of manipulating the perception of value tethered to an object.
If art is to be considered the most relevant form of NFT monetization today, then it must be understood as a store of value proposition. However, the current state of the market and indicators showing high-value purchases suggest that high-net-worth individuals are currently the driving force behind market growth, along with businesses and funds eager to join the NFT ranks. With the vast majority of retail investors not having such capital to gain access to the growing NFT market, the question is whether these assets are becoming just another asset class, becoming inaccessible to most decentralized market participants in the same way as traditional art forms store of value.
If so, then NFTs as an art form are heading in the direction of Bitcoin, a largely unaffordable asset for most market participants. But unlike Bitcoin, which can be divisible into satoshis, NFTs are non-fungible, and currently mostly indivisible, and cannot be sold for less than the price set by the artist, or less than the buyer The price paid for it, as this would negate its characteristics as a store of value asset.
Even in the event of a total market crash, the value of NFTs bought for millions of dollars is highly unlikely to decline. Investors who buy them will do their homework and are unlikely to be motivated by the current frenzy to shell out the kind of money to add pixelated (and programmable) art to their portfolios.
Still, NFTs can be overvalued, or misjudged, as was the case with Cryptokitties NFTs, which have seen their value drop significantly since their heyday. But one trump card in favor of artistic NFTs in this matter is that they are works of art, not part of an entertainment DApp like Cryptokitties.
some food for thought
Most proponents of NFTs are touting them as a whole new art form that allows artists to express themselves and find appreciation in digital media. The same proponents are also quietly hiding the fact that most artists do NFTs in pursuit of fame and fortune, fueled by the success of the few mentioned above.
This raises the question: can NFT art really be defined as art, or is it just an over-glamorized form of digital imaging that has been around for decades and is now riding a wave of hype? Technology. Collectibles can be a great store of value, but the current dynamics in the market show a bubble, which raises more questions about the soundness of this type of investment. Assessing the long-term viability of each NFT collection will be key. CryptoPunks, for example, has brand and historical value. A picture of the toilet, minted as an NFT, may or may not be.
in conclusion
Some NFTs may mature and retain value like high-end art and other collectibles, but from what we’ve seen so far, neither can compete with the Mona Lisa in terms of artistic value and potential for exclusive display in museums. compared to. Digital imaging is a very popular form of expression, and there are dozens of platforms that allow these digital artists to display their artwork and attract the attention of viewers, admirers, and even buyers — DeviantArt and Pinterest are just a few examples.
But it is clear that many artists of NFT collecting and distribution will fail in the future, as the NFT marketplace eventually falls back and the application of the underlying technology is redirected to more practical purposes in other sectors of the economy. So if there is an NFT fund, or infrastructure around NFTs like OpenSea, or underlying collateral like Ethereum, Solana, Flow, or any platform token that supports NFTs, it may be safer because regardless of the dynamics of the NFT art market , they all grow and adapt to new use cases.
True art is a matter of legend and history, and NFT is just a trend right now, so investors in pixelated penguins should think carefully about whether they can find a buyer in the future willing to hang something similar on the back of a luxury yacht. on a wall, or displayed on their profile as a status symbol.
