The Rise and Fall of NFTs

Back in mid-2021, NFTs were riding high. It felt like anything being sold as an NFT could fetch stupid money. You could fart into a jar and make an NFT to commemorate the moment, possibly getting hundreds of thousands or even millions.

What kickstarted the craze was when Beeple sold an NFT for $69 million titled "Everydays - The First 5000 Days." it broke records. We went from "we can change the world and supply chains with NFTs" to "we can make money off JPG images" fast.

The NFT craze was regarded as a digital gold rush, and in the beginning, it was fun and exciting to see blockchain being adopted this way. But, like most things, once money comes into the equation, things stop being fun and become business quick.

The main underlying driver of the NFT hype was simple. As long as the hype was around and growing, prices would continue to climb. For many, it seemed like the party would never end. More people kept showing up, and we partied the night away.

Once celebrities and rich people started getting involved, it felt inevitable that the hype bubble would crash. We saw the same thing with podcasting. Once a grassroots movement, celebrities wanted podcasts too, and then they just became radio.

Speaking of celebrities, a few got into the NFT game themselves. Buying up big in the NFT world because the trend would only continue, and easy money was to be made. Right? You had Eminem buying Bored Apes, Timbaland and others getting in the game. Bored Apes seemed to be the most coveted NFT hype for celebrities.

However, let's hone in on Logan Paul's NFT collection for a moment. At the peak of the insanity, his collection was worth approximately $2.8 million. In 2022 as the prices of NFTs started tumbling, the value of his NFT portfolio dropped by a whopping 70%. This values Logan's portfolio at an estimated $889k.

And the phrase people in crypto love to use, "You only lose if you sell", doesn't apply to NFTs. If you think that the value of NFTs will ever go back up to their record 2021 highs, I have a bridge and magic beans to sell you.

From a technical perspective, NFTs have utility. For supply chains, counterfeit protection and verification, NFTs are essentially digital contracts on a blockchain that cannot be altered without leaving a trail and without having permission to do so.

The problem is NFTs were pigeonholed into being these digital assets associated with JPG images and not marketed for their true worth and potential. The legitimate adoption of NFTs was overshadowed by greed and scams.

I am glad that the hype died down and the NFT bubble popped. We might finally see NFTs leveraged properly and not just to make a quick gain.