NFTs Are Not Dead Yet But Only Evolving Despite Grim Metrics In Recent Months
After enjoying a stellar start to life in 2021, enthusiasm around non-fungible tokens (NFTs) has waned, prompting a wave of speculation that the asset class has seen its death knell.
While a cross-section of the investing public is holding onto the notion of the death of NFTs, executives building with digital collectibles argue that the ecosystem is merely undergoing a period of correction. Grim floor prices are being construed as growing pains for NFTs, signaling a much-needed evolution for the asset class.
Founder of video platform RECRD Anoir Houmou argues that NFTs are merely evolving beyond the hype and the buzz that characterized them in 2021 into an era of real-world application and sustainability.
“Recent trends indicate a maturing of the market after the explosive growth witnessed over the last few years,” said Houmou. “We’re moving into a phase where the focus is on sustainability, real-world utility, and integration into broader technological ecosystems.”
Houmou argues that the ecosystem is ready for a new wave of institutional investors, tailor-made for practical solutions with real-world utilities. For the executive, leading practical use cases for digital collectibles include giving holders access rights to events, subscription use cases, environmental sustainability projects, and utilities revolving around retail, fashion, and education.
Other pundits are pitching their tents with NFTs citing an integration of the technology with Bitcoin (BTC) blockchain via Ordinals. Since their launch, Ordinals sales have soared to $675 million despite the falling metrics around other digital collectibles with experts pointing to a new era for NFTs.
“With Bitcoin-based NFTs recently recording sales volumes of $148 million and Bitcoin standing as one of the top three leading blockchain networks for NFT sales, this signifies strong NFT sentiment,” said Oh Thongsrinoon, CMO at Web 3 firm Altava.
When faced with the question of falling floor prices, the NFT executives rationalize the trend as a simple market correction common in the life cycle of every emerging asset.
“NFTs are evolving beyond collectibles into tools for digital ownership and utility,” SNPIT founder Toshiuki Otsuka. “Market corrections are normal and signal maturation.”
The grim figures surrounding digital collectibles
Back in 2021, NFT sales totaled an impressive $18 billion, buoyed by collectibles like Bored Ape Yacht Club and CryptoPunks and the impressive $69 million purchase of Beeple’s digital art.
As 2022 rolled by, enthusiasm for the asset class began to wane with the numbers painting an even grimmer picture by 2023 and 2024. In the first quarter of 2024, NFT sales stood at $4.1 billion but by Q2, the figure had tumbled by 45% to trade at $2.9 billion, spelling gloom for the broader ecosystem.
Analysts are rationalizing the recent monthly decline in digital collectibles with BTC’s recent lackluster performance over the last couple of weeks. Despite the broad faltering outlook, NFT sales on Solana, BTC, and Ronin are still on the ascendancy, giving enthusiasts a measure of hope for better days ahead.
