I was sitting in my pyjamas and sipping on my evening tea when it happened. That slow dip that seemed like the incoming of a storm. While some people carefully came out and said that the 19th May market crash was inevitable, some had not anticipated the fall. Regardless, it was indeed a point of significance in the history of cryptocurrency. Consequently, it was also a point of change for NFTs.
The Crypto Market Crash and the Fall of NFTs
I was sitting in my pyjamas and sipping on my evening tea when it happened. That slow dip that seemed like the incoming of a storm. While some people carefully came out and said that the 19th May market crash was inevitable, some had not anticipated the fall. Regardless, it was indeed a point of significance in the history of cryptocurrency. Consequently, it was also a point of change for NFTs.
The cryptomarket crashed but NFTs are not dead
From the early beginning, the market has seen a tumultuous growth. Beeple sold his artwork for a whopping $69 million on March 11. Naturally, this sparked an increase in the number of sales of NFTs from 92,797 in the first week of March to over 179,000 sales in the last. This kind of overnight (fortnight, to be precise) increase in any tech innovation is quite natural and expected.
Unfortunately, for us NFT lovers the numbers look bleak post the market crash on 19th May. Now the sales have plunged to 99,513 (as of 22nd May). Some had long predicted the fall of NFTs, thinking that it is a mere hype that is about to fade into oblivion. But¸ we must not forget that NFTs are traded in cryptocurrency (Ethereum, to be precise). China’s recent crackdown on retail mining of cryptocurrency induced a year-low plunge for bitcoin.
Ethereum’s prices too dropped by 22% on the day of the crash. This might lead some to believe that the crash and its consequences mean that people are going to sell their NFTs for the price that they are given, cash out of Ethereum, and save themselves. This is so not true.
Amidst fears of rising inflation, people are not willing to hold on to cash. In fact, most of them are looking to store their money in assets like NFTs or cryptocurrencies like bitcoin. Contrary to the general sense of the market, holders of NFT are not going “to sell their NFTs for 50%” when they have already spent thousands on them, Pranksy (a collector of art) told Reuters.
While this may be good news for people who have already invested in these digital tokens, some experts believe that it is hard to predict the kind of impact this market crash will have on them.
People are still buying NFTs
We know it sounds a bit strange – but can we tell you a little fact? People are still buying and investing into NFTs.
In fact, more and more people and institutions are cashing in on this craze. One of the most recent addition is Sotheby’s, who recently collaborated with the “mysterious” artist Pak, whose artwork The Fungible Collection was sold for more than $16 million.
The surge in sales for NFT marketplaces like OpenSea peaked at $150 million in March, it fell to $93.6 million in April. As we also saw above, trading volumes for NFT sales were considerably lower in the month of April than March.
But that doesn’t mean that the craze has entirely ended. If we look at it from the perspective of a mere “fad” then there have been several trends that have had an impressive start but have fizzled out soon enough.
NFT’s craze however is beyond a passing trend. The number of benefits that NFTs give us are huge and that is what sets it apart.
Let’s understand the Hype Cycle methodology and how it applies to NFT. The “innovation trigger” in this case was Beeple’s sale of Everydays which we have talked about earlier. While it seemed like an incredible concept at the time, it’s “global use had not been proven”.
The “peak of inflated expectation” followed as more and more people thought that their time to get-rich-quick had finally come. Moreover, the number of NFT marketplaces had suddenly seen a sharp increase.
Moreover, the folks at NonFungible stated that trading volumes had increased substantially from last year.
However, as with every tech innovation, the “trough of disillusionment” hit quite soon as the “expectation” of making millions dissolved as quickly as the number of people creating and minting their NFTs on the blockchain increased.
However, we can now safely assume that we are in the “slope of enlightenment” as more and more organisations are attempting to understand the massive benefits of NFTs and slowly making their way through the “hurdles”.
Now, we patiently await the “plateau of productivity” which we are most likely going to hit soon. But it all depends on the overall market condition.
New entries in the NFT space
Okay, here’s some news that is going to excite you in ways that you’d never expect NFTs to excite you in. Have you heard of Max Felicitas and Martina Smeraldi? We doubt that you wouldn’t have.
Under a new NFT project called Pornvisory, a porn-based NFT, is going to launch the tokens for these incredibly hot pornstars. In fact, their non-fungible tokens have already been “auctioned on eBay Inc. in addition to blockchain platform Opensea and the firm’s own PVY ART marketplace”.
We can tell you’re drooling already!
But that’s not the point. The point is that several artists from different industries find NFTs a more reliable way of making a deserving income.
Take for example musicians like Grimes, Steve Aoki, and Kings of Leon have successfully sold their work for $6 million, $4.25 million, and $2 million respectively. For artists that put in dedicated hours of effort into creating their music, they earn an approximate $43 off of 10,000 streams.
Mike Shinoda, the co-founder of Linkin Park, has said that even if he would upload his song to “DSPs worldwide”, he would not be able to earn $10,000 – the amount that he was offered on one of his “piece”.
This is just one of the many ways in which artist are benefiting from NFTs.
NFTs solve problems
Let’s take an example here. Let’s suppose that you are a writer who has been working on a concept for a revolutionary thriller that you think is going to take the world by a storm. You decide to share your ideas with a bunch of writer friends of yours and they like it. Before you have even written the concept on paper, your writer friends can pitch it to a publisher and get working on it as if it were their own.
You know that your idea was stolen – but there’s no way to prove it.
However, if you decide against of meeting with your friends for beer that day and go ahead and mint an NFT for that very concept and add in as many details as you possibly can – you save yourself the “idea” theft. Now, you can share that concept with publishers, scriptwriters, actors or anyone else in the world – and rest assured that your idea won’t be copied.
The benefits of the NFT technology are endless.
Nikhil Sharma writes about the uniqueness of their NFTs and its uses for the “fashion tech world”. He explains that the increasing problem of counterfeit merch is solved by the distinctiveness of the NFTs.
Kamil Sattar, a Founder-CEO of an e-commerce mentoring company, writes on Forbes that the NFT tech will “help streamline digital sales and enable lifetime product data tracking”. This, he continues, is something that has so far not been possible.
Unlock offers the opportunity to unlock (no pun intended) membership benefits of the Forbes website.
Conclusion
Whatever happens in the broader crypto market is going to have an impact on the market for NFTs. Several people have started questioning whether it is even as unique and safe as the technology claims – primarily because of the increasing number of NFT threats going on in the market. However, one thing is for sure, every digital asset that is decentralised has its benefits and limitations.
We must exploit the benefits and find a way around the limitations.