Posts

The NFT hype bubble has burst and looks like it’s over...for now

avatar of @julianhorack
25
Bitcoin Babaji
@julianhorack
·
·
0 views
·
4 min read

As an NFT artist I sold a few of my minted artworks earlier this year at Hive’s www.nftshowroom.com but if we look at stats, we can see that the NFT hype appears to be over for now. Sales are down 90% globally according to these articles https://cointelegraph.com/news/nft-sales-down-90-since-market-peak
https://protos.com/nft-market-bubble-popped-crypto-collectibles-are-over/ .
Was that the NFT bubble of 2021, which has now burst and evaporated into the mists of crypto history?
According to the referenced articles, most NFT trade is for collectibles, like CryptoPunks, etc which traders buy as an investment and not for any aesthetic value. They are simply seen as a store of value, like rare art used to be.

In early May – just one month ago - $102 million worth of NFTs were sold in a single day and $170 in the week. This week saw only $19.4 million in sales, described as a 90% drop. Actually the word used by the article is “collapse”.

Is NFT art finished as a concept? NFT collectibles still have some degree of traction as traders and investors continue to spend cryptocurrency on them, but my field of fine art appears to be dead in the water compared to the hype and FOMO of earlier this year. Apparently 70% less wallets are involved in NFT trading today, compared to the market peak.

NFT sports memorabilia has overtaken fine artworks in sales recently, coming up second only to those collectibles that continue to attract trade. Obviously this is all investment driven with the hope of a profit on resale via the secondary markets. Art appears to have lost its value which shows you just how subjective and sentiment-driven the NFT art industry was.

I say “was” but we can always hope that the art sales will perhaps revive if and when the bitcoin bull market resumes after the current correction. It would be hard to imagine that NFT art mania only lasted four months in the history of cryptocurrency, as a concept. If so then I was lucky to catch even a glimpse of it. I sold about six of my minted artworks for a small amount of Hive tokens on the blockchain over the last two months or so. Most of the others still sit there in my gallery at www.nftshowroom.com/julianhorack.

According to www.nonfungible.com just over 800 NFT sales were concluded daily at the start of this year, rising steadily. By late March they peaked at 3500 sales daily across the range of NFT categories, which include collectibles, artworks, sports, gaming items and some others. But then the market took a steep drop and today sits at less than 500 sales a day.

Admittedly the dollar value of trading is up at over $7 million a day currently, way more than the $1.3 million at the start of this year. However, it is way down from the $33 million plus traded daily in April at the peak of the craze. The current increase in ETH value since January may be the reason dollars traded for NFTs is still so much higher than back then. Individual sales have dropped though, from almost 600 a day at the start of the year to 2000 a day in April at the peak and now down to under 350 a day.

By these stats it appears that the NFT bubble has popped and the hype is over. That was merely a blip in the cryptocurrency history. The era of the NFT is gone, in just a few months. I might lament the loss of further opportunity to sell my artworks but I love making art pieces so will continue with my hobby. For those who actually invested cash or crypto in purchasing CryptoPunks or any of the other collectibles, your investment may be disappearing in that bubble that has now burst.

Nevertheless, my sentiment remains optimistic that your investments may well retain more value than my artworks, for example. So you may be able to recoup your investment in the coming second leg of the bitcoin bull market. As for those artworks by the likes of Beeple and others, my optimism is a bit more reserved. Art is so subjective and sentiment-driven, and NFT art in the cryptoverse will be even more so. Generally nobody buys an NFT artwork to hang up on their wall at home. Mostly it’s as an investment with the hope of resale in the secondary market. Now that even the primary market has tanked, so too will any interest in buying resales of random artworks.

The NFT concept still has great use case, when it comes to non-fungible tokenized documents, tickets, proof of ownership, etc, so the tech is still very valuable. The use in which I personally utilize it as proof of art may be less sought after. I hope I’m wrong and collectors return to the digital art galleries like Opensea, Rarible on Ethereum and nftshowroom.com on Hive blockchain, among others.

I’m sure blockchains like Tezos. WAXP, MATIC, Enjin, MANA, etc which specialize in NFT tokens, will hope so too. They are invested in the future of NFTs as gaming collectibles or second layer solutions on ETH. So too are entire gaming projects like AlienWorlds, Farsite, MegaCryptoPolis, AxieInfinity, etc which all trade in NFTs as past of their ecosystem.

Gaming and the collectible items associated with it will probably always be somewhat popular, so the NFT has an important role to play. Artists like me may simply have to go back to the drawing board and look elsewhere for investors or collectors of fine art.

(image from https://www.larvalabs.com/cryptopunks)

Posted Using LeoFinance Beta