Since the market boom in 2021, the NFT field has undergone a significant transformation, from avatars to celebrity sponsorships.
Non-Fungible Tokens (NFTs) are a type of blockchain-based asset that is a digital file such as an image, video, or an element in an online game.
Business leaders have a tonne of options thanks to NFTs since they let companies develop novel business models, which raises the value of their present products and services and expands untapped market potential. This new technology offers several opportunities for trading and investing in a new category of digital assets, as well as an alternate method of funding projects.
Their popularity skyrocketed in 2021 as wealthy cryptocurrency speculators rushed to cash in on price increases, but sales volumes have plummeted in recent months.
The NFT market plummeted from its peak of $17 billion in early 2022 to $470 million in September 2022, a 97 percent drop, according to data from blockchain analytics firm Dune Analytics. The sharp downturn in the NFT market has raised concerns about whether it will be able to recover from the current downturn any time soon.
The global cryptocurrency market has been trading below the $1 trillion mark for quite some time now as cryptocurrency prices continue to fall. However, observers believe that negative feelings will not last long.
Sumit Ghosh, co-founder, and CEO of Chingari, the world’s leading networking social media app, says projects like DeGods and Yoots have sparked renewed interest in NFTs recently. In addition, several brands, celebrities, and athletes are joining the NFT space. Thus, “the recent recession is just a setback on the road to wider adoption of NFTs around the world.”
As of September 26, daily NFT sales were allegedly less than 30,000 or $9.2 million.
Why The Negative Reaction?
As global monetary policy tightens and investors move away from riskier assets, the NFT market is experiencing rapid liquidations. Experts say that the rise in interest rates in recent months has kept investors from investing in long-term projects in the markets, and NFTs are no exception.
Ashwani Kumar, founder, and CEO of HelperWorld, an NFT platform, says the NFT market is crashing due to declining investor interest in these assets. “According to recent data from Google Trends, there has been a significant drop in the term ‘buy NFTs,’ by almost 80 percent,” it adds.
At the same time, the term ‘Sell NFT’ is up 83 percent in Google’s search interest rate. It notes that users have lost interest in the NFT domain, it adds.
Experts also predict that the value of NFT projects will fluctuate as a result of the current state of the market. Yaroslav Shakila, CEO of Yard Hub, a platform for blockchain, Web3, and NFT business ideas, stated to Cointelegraph:
“NFTs have undoubtedly been impacted by the bear market, although frequently less so than traditional crypto and altcoins. The political and financial climate on a worldwide scale will determine what happens next. Given how badly the U.S. dollar is now performing versus all tech companies and risky assets, one could anticipate short-and medium-term fluctuations in NFT values.”
NFTs continue to receive significant attention despite these low volumes. Celebrities continue to be involved in the NFT space, and Snoop Dogg recently partnered with Mobland, the mob-themed metaverse, to create NFT digital marijuana farms. Weed farms were developed as part of NFT 3.0, the third generation of NFTs.
The Future possibilities of NFTs
Not only do some business experts believe that the NFT market will survive, but they also believe that it will keep growing and play an increasingly important role in the digital economy. The NFT business could be worth $231 billion by2030, according to a report that Cointelegraph reported. This is a result of continued adoption among the video gaming, music, art, and digital collectible industries.
Additionally, experts predict that in the upcoming years, our lives will become more virtual. It’s feasible that individuals may soon be able to conduct their daily tasks using virtual resources in a virtual environment. In essence, this will signify the development of a metaverse where everything is changed into an NFT token. The revolution is already well on its way to being accomplished, even though it is unclear how this will coexist with our physical lives in the “real world.”
The video game industry’s reaction to the introduction of the NFT has been the subject of much speculation. While some companies are currently giving away digital assets as part of blockchain games such as Ember Sword, the technology has yet to be widely adopted by the gaming community, leaving many to wonder how and even if it will become popular in the gaming industry.