Non-Fashionable Token
Christmas is approaching and the festive spirit is slowly engulfing some of us more than others. I am reminded daily, during our usual 10 am walk, that the people working in front of house at Hamleys of London are not being paid enough. The amount of passion they put into every performance is admirable and appreciated by the kids who enter the shop but isn’t valued as much by many others.
It’s during this time of year that I catch myself feeling particularly nostalgic – thinking about how much more enjoyable this time of year used to be when we were clueless 6-year-olds. Waiting for Santa to give us that Lego set we wanted.
When I feel randomly dewy-eyed about being older, I like to indulge and become that 6-year-old me by watching cartoons. A classic of my early childhood, and many others, is The Simpsons.
Nostalgia went out the window though when in the latest episode I watched, I was brought back to Financial Tech Headhunter/Part-time Article writer real life.
Homer came up with a get-rich-quick scheme – the hapless dad turned Bart and then himself into NFTs to make millions. These schemes of his usually end badly – it all goes wrong when Homer finds out from a floating pizza cat that “the NFT craze is over”.
Is the floating pizza cat right? Are NFTs dead? The episode has been widely applauded by NFT fans and sceptics alike for successfully poking fun at a side of the crypto world that exploded a couple of years ago but has now gone very quiet.
I think there’s hope
Although, it doesn’t look like it on the surface; according to researchers at DappRadar, the value of NFT transactions just hit the lowest point since the NFT market peaked. Trading volume has fallen 89% from the beginning of 2022 to now. Back then in the first quarter of 2022, it was $12.6bn (£10.4bn), and now in the third quarter of 2023, it’s a mere $1.39bn in comparison.
According to the NFT Price Floor website, the floor price of Bored Ape Yacht Club NFTs (the value of the cheapest in the collection) peaked at the beginning of May 2022, costing around $268,000 (144 Ethereum coins). Now it’s dropped to $56,000. Collector and artist Taylor Whitley from the US felt forced to sell six of his seven prised Bored Ape NFTs as the offers he was receiving were getting worse and worse.
It’s a buyer’s market, and there are plenty of happy buyers out there making the most of the downturn. Adam (known online as Little Fish) recently bagged himself a CRYPTOPUNK artwork NFT for $663,000.
The full-time crypto investor from Europe acknowledges that it’s a large amount of money but he thinks he got a bargain with his CryptoPunk #3609. After all, a year ago its seller rejected an offer for $1.18m.
In winter, you can buy summer clothes for cheap
Bitcoin and Ethereum (ETH) have not recovered from various crashes in 2022 that saw the value of coins plummet and then stagnate in the crypto winter. There are recent signs of a thawing, with Bitcoin rising to $37,000 a coin, but the growth is nowhere near the $70,000 in late 2022 (yet, there’s still time).
Although NFTs are a different product they are built on the same blockchain technology as cryptocurrencies, and the wealth of many of the biggest NFT buyers is in lock-step with cryptocurrencies. When crypto is worth more – they have more to spend on NFTs.
The business of NFTs
One NFT business that appears to be different from the trend is Pudgy Penguins – a brand that recently started selling soft toys based on its NFT characters Each toy sold provides royalties to the corresponding Pudgy Penguin NFT holder.
Allowing NFT owners to make money through intellectual property appears to be a trend that is potentially reviving interest in the products.
Other new ways buyers are being offered increased incentives are through membership to exclusive events, physical versions of NFTs and scrapping of artist royalties.
Many predict that the market will rise once more, but admit it’s unlikely to reach the levels of “pandemonium” previously seen. They might have a bright future as art collectables, but the boom days are over.
To finish
The current NFT market is witnessing some sort of revival, all things considered, with monthly sales exceeding $415 million and Ethereum leading the charge, closely followed by Solana Labs and Polygon Labs. Despite the positive trends though, it is evident that the NFT market needs cautious optimism due to the lack of growth in transactions.
The future of NFTs seems promising, with projected growth in revenue, users, and market capitalisation. The emergence of Web3 gaming and the advent of innovative digital art collections could attract a substantial share of new capital. These developments signify a vital maturing of the NFT market, steering it away from fleeting hype and toward enduring value.
However, its inherent risks such as cyber-attacks and identity thefts, require close and serious attention.
Written by Karolis Kundrotas
📅 This Week in Crypto 📅
The license is pending operational approval and allows Crypto.com‘s Dubai entity to offer exchange, broker-dealer, and lending and borrowing services. They were granted a Virtual Assets Service Provider (VASP) license by the city’s regulator, pending operational approval. CEO Kris Marszalek said they look forward to working with regulators to contribute to Dubai’s crypto industry and said the city is a “leading market when designing effective regulation.”
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