Bloomberg: NFT Market Losing Appeal as Investors Shift Focus
The year 2024 has brought optimism to the cryptocurrency industry, with the approval of Bitcoin spot ETFs at the beginning of the year and the official approval of 19b-4 (Exchange Rule Change) forms for eight Ethereum spot ETFs, including BlackRock, Fidelity, and Grayscale, by the United States Securities and Exchange Commission (SEC) on May 24th. As a result, many investors have a positive outlook, believing that Bitcoin and Ethereum will reach new highs this year.
Meanwhile, Bloomberg suggests that the appeal of non-fungible tokens (NFTs) in the broader cryptocurrency token market is further diminishing. According to Google Trends data, searches for the term “NFT” have reached their lowest point since 2021, which was the year NFTs entered the mainstream market.
Data from the analysis platform DappRadar shows that NFT sales in the first five months of this year have decreased by over 6% compared to the same period last year, amounting to only $850 million. In contrast, the peak sales of NFTs in January 2022 reached $1.72 billion.
Bloomberg points out that the neglect of NFTs has become more severe since the SEC started reviewing Ethereum spot ETFs. Some investors, anticipating their approval, have started reallocating funds and investing in Ethereum while choosing to sell their NFT holdings.
Nicolas Lallement, the founder of NFT analysis platform NFT Price Floor, explains that capital movement is inherent in the cryptocurrency market. He expects Ethereum to continue attracting and absorbing market capital, leading to a decrease in prices for other asset classes, such as NFTs.
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Blue-chip NFTs’ Floor Prices Decline, Artistic Creations Still Retain Value
Bloomberg points out that the prices of many popular blue-chip NFT collections have already dropped by 40% to 50%, including CryptoPunks and Bored Ape Yacht Club.
According to NFT Price Floor data, the floor price of the Ethereum NFT collection CryptoPunks has fallen by 29% compared to the lowest point in the market last year, which was considered quite dire by many. Additionally, the floor price of the Bored Ape Yacht Club series, calculated based on Ethereum, is about half of last year’s lowest point, indicating that the market is still under significant pressure.
However, renowned NFT collector Daniel Maegaard states that even after the decline in enthusiasm since the market peak in 2021, most NFT collections continue to sell or maintain stable prices. Maegaard also mentions that he recently sold some NFTs belonging to the art market, including works by digital artists XCOPY, Hackatao, and Coldie, which represent high-quality and artistic pieces that are still sought after in the market.
Exploring the “Application” of NFTs Continues
In fact, using prices as a measure of the decline in appeal for NFTs may be unfair, as the current NFT technology is more commonly used for “applications” in daily life compared to the NFTs of the past two years, which were primarily “avatar-based.”
For example, when it comes to tokenizing real-world assets, NFTs can represent the liquidity of certain products, including real estate, bonds, carbon credits, and commodities. In this case, NFTs are no longer just tokens symbolizing identity but rather certificates linked to real assets, allowing holders to engage in lending, buying, and selling through relevant protocols while enjoying benefits such as liquidity and transparent blockchain transactions.
Furthermore, NFTs can also serve as participation certificates. For example, the Web3 data asset platform EchoX introduced “Creator NFT Digital Stamps” at the SusHi Tech exhibition in Japan, preserving memorable digital footprints permanently on the blockchain in NFT form for attendees to hold. In addition to their commemorative value, these pieces of information can provide other brands, such as restaurants and hotels, with a better understanding of the interests of wallet holders, allowing them to offer services that better cater to individual preferences.
Moreover, in recent years, NFTs have become a solution for the fashion industry. The European Union has included “Digital Product Passports” as part of its sustainable and circular textile strategy and called for the mandatory use of digital product passports for textile products sold in Europe by 2030. Adopting blockchain and NFTs as digital identity cards for products can comprehensively record information such as origin, material composition, supply chain, sustainability, and recyclability, preparing for regulatory compliance and addressing consumers’ concerns about the authenticity of luxury goods.
The range of NFT applications is rapidly expanding and has gone far beyond the original avatar art. From digital identities and membership management to physical asset ownership, the potential and application scenarios of NFTs continue to grow.
Source:
Bloomberg, CoinTelegraph
