NFTs (non-fungible tokens) is a controversial topic. People have made a massive profit off their NFTs, while others have suffered major losses. Some claim that NFTs are dying, due to the NFT market’s trading volumes decreasing 97% since January 2022. This massive loss in value is worrying, but it doesn’t mean certain doom.
In our opinion, the future of NFTs has great potential – and we have five solid arguments for why:
- Inflation is temporarily affecting the market.
- The biggest companies in the world are still investing in NFT tech.
- Bored Ape’s are still selling for high prices.
- Elon Musk (we’ll explain more later).
- Gaming and NFTs are a match made in heaven.
We’ll delve into the above down below but first, a brief recap of what NFTs are.
What are NFTs and how do they work?
NFT stands for non-fungible token. An NFT represents the digital ownership of a unique piece of media that exists online. It could be a piece of artwork, music, or a 3D model of an item. Bored Apes are a popular example of an NFT art series. NFTs use blockchain technology, like cryptocurrencies. Most people buy NFTs with cryptocurrency. In return, they receive an identifier that represents the digital media.
Are NFTs dead? 5 arguments against that statement
Are NFTs dead? We say no. Here are five arguments that support our opinion.
1. Inflation crashed NFT prices (but didn’t kill them)
Inflation is a major source of disruption in the NFT market. It’s affected most trade assets like stocks and many vital commodities like gas. High inflation means that consumers have fewer funds to spend and invest in NFTs, which is why trading volumes have fallen.
The US Federal Reserve aims for a healthy, yearly inflation rate of about 2%. This rate is also an international standard. Currently, the rate of inflation sits at a stomach-turning 8%. Inflation has been exacerbated by major world crises, like the COVID-19 pandemic and the Russo-Ukrainian War.
Some even make the bold claim that the NFT industry collapsed this year – but that’s not true. Despite inflation’s impact, the NFT market is still incredibly valuable. Estimates put the NFT industry somewhere between $800 million to $4 billion. Investors are holding onto their NFTs until the economy stabilizes.
Suggested reading: US CPI Data: What is the CPI Effect on Crypto?
Inflation’s role in crashing NFT prices doesn’t reflect the potential of the market. In fact, interest in NFTs is only growing. Companies are looking to adopt NFTs for broader commercial purposes. Once NFT technology becomes mainstream, prices are sure to soar.
2. Nike NFT is just getting started
Companies like Nike are looking into using NFT technology to further their brands. The sports apparel company recently announced the launch of its own Web3 platform. Swoosh, named after their logo, is bringing Nike NFTs to everyone.
Swoosh is a marketplace for all kinds of virtual Nike merchandise, using Polygon NFTs. These NFTs use the Polygon blockchain. Nike’s partnership with Polygon makes buying NFTs easy for anyone. Customers can buy Nike clothes for their virtual avatars, from shirts to sneakers. All you need to do is set up a digital wallet with ETH or MATC tokens. Nike is taking full advantage of NFT’s potential for real-world purposes.
The platform and its first Nike NFT apparel line will drop early in 2023. If you’re wondering who can afford these innovative NFTs, the answer is anyone!
Nike said it plans to sell the digital sneakers for less than $50. The company has already made over $90 million in NFT sales from Swoosh. It is clearly planning to continue into a future full of NFTs.
3. Bored Ape NFTs are still trending
The Bored Ape Yacht club is still one of the most prominent NFT examples in the market. The art series featuring 10,000 customizable cartoon apes became incredibly popular two years ago. One Bored Ape sold for $3.4 million, and in 2022 another sold for $1.7 million.
The average price of Bored Apes has fallen, but there are still many worth over $100,000. Sales are still made often; Bored Ape #232 sold for nearly $1 million on November 24, 2022. Some Bored Ape Yacht holders are having difficulty selling their high-ticket NFTs. This is not proof the market has died out though. Searches for the Bored Ape Yacht Club are increasing – with nearly 10,000 searches made just in the last month.
4. Elon Musk bought Twitter
The NFT community is especially thriving on Twitter. The platform has been one of the most supportive in integrating NFT technology. In early 2022, Twitter announced a new account feature – NFT profile pictures. Subscribers of Twitter Blue can show off their NFTs in a hexagonal profile frame. The premium subscription also grants users verification and a blue checkmark. This provided NFT enthusiasts with a convenient platform to discuss NFTs.
CEO of Tesla, SpaceX, and other companies, Elon Musk, recently added CEO of Twitter to his list of titles. In October 2022, Musk finalized his takeover of the platform, worth $44 billion.
The billionaire has voiced both annoyance and love for NFTs, but many think he’s a secret fan. He was even rumored to have bought a Bored Ape NFT earlier this year. The news makes it clear that Twitter is eager to incorporate digital payments.
Musk’s transition to CEO of Twitter hasn’t been all smooth sailing. While many users are complaining, searches for Twitter news are trending. The takeover is bringing more eyes to the platform. Any press is good press to raise awareness of crypto and NFTs.
It’s possible that Twitter will become a marketplace for NFTs. The feature, called NFT Tweet Tiles, is still in development. It will allow users to display, sell, and buy NFTs through tweets. To do so, Twitter will partner up with four other NFT marketplaces:
- Magic Eden,
- Solana,
- Rarible,
- and Dapper Labs
will supply users with a huge variety of NFTs. Elon Musk’s enthusiasm to innovate on Twitter is sure to bring more interest to the NFT market.
5. Gaming and blockchain will continue to evolve together
NFTs are more versatile than many realize. Beyond works of art, NFTs have massive potential in the gaming industry. The current stagnation of volume and sales in the market is a result of inflation. It might also be because the gaming industry is still adopting NFTs. In the last crypto bull cycle, many games that incorporated NFTs received great feedback. One example is Axie Infinity, where players can collect pets and battle other players. The last cycle’s success predicts continued success in the future.
Games have all kinds of digital assets – character skins, weapon skins, and unique items. There are already games you can play for pay in the Metaverse that incorporate NFTs. There are also NFT games like Alien World or Bomb Crypto, which operate on a blockchain. Players can earn real-world value by playing, in the form of crypto or NFTs.
“The global gaming market is projected to grow from $229.16 billion in 2021 to $545.98 billion in 2028 at a CAGR of 13.20% in the forecast period, 2021–2028” – Fortune Business Insights
The majority of online gamers have an interest in using cryptocurrency in-game. Gaming studios are very willing to use crypto monetization strategies. Players will reap all kinds of benefits. They include a diverse crypto portfolio, instant transactions, worldwide availability, and anonymity.
Are NFTs worth it?
You’ve seen headlines of people buying and selling NFTs for thousands or millions of dollars. These articles make entering the NFT market sound impossible. The current bear market also makes it difficult to believe in the long-term success of NFTs. However, when you dive into real data, you’ll discover it’s possible for the rewards to outweigh the risks.
You also don’t need to be a millionaire or have thousands saved to invest in NFTs. There are multiple ways to participate at affordable prices. The current market conditions aren’t a sure sign that NFTs are failing. In fact, our arguments prove otherwise. NFTs have a place in the future of Web3 and will find a place on many popular platforms.
From the new Nike NFT collection to games in the Metaverse, NFTs have unlimited potential. Their commercial use is being developed, and demand for them will soon go up. While they are a risky investment, just like crypto or stocks, NFTs are worth it.
You can pursue your interest in NFTs as a hobby or as a serious financial decision. You can even create your own NFT project! Either way, NFTs are a great way to get involved in Web3 as it develops.
Disclaimer: “The content should not be construed as investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is made available to you for information and/or education purposes only.
You should take independent investment advice from a professional in connection with, or independently research and verify any information that you find in the article and wish to rely upon.”
