Bloomberg: NFT Market Losing Appeal as Investors Shift Focus
The year 2024 brings optimism to the cryptocurrency industry, with the approval of Bitcoin spot ETFs and the Securities and Exchange Commission’s (SEC) approval of 19b-4 forms for eight Ethereum spot ETFs, including BlackRock, Fidelity, and Grayscale, on May 24. As a result, many investors have a positive outlook and believe that Bitcoin and Ethereum will reach new highs this year.
Meanwhile, Bloomberg believes that the appeal of non-fungible tokens (NFTs) in the broader cryptocurrency token market is further weakening. 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 dropped by over 6% compared to the same period last year, totaling only $850 million. In contrast, NFT sales reached a peak of $1.72 billion in January 2022.
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 begun shifting their funds to invest in Ethereum and selling their NFT holdings.
Nicolas Lallement, the founder of the NFT analysis platform NFT Price Floor, explains that the nature of the cryptocurrency market is capital rotation. He expects Ethereum to continue attracting and absorbing market capital, leading to a decrease in prices for other asset classes like NFTs.
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Blue-chip NFT Floor Prices Decline, Artistic Creations Still Hold Value
Bloomberg states that the prices of many popular blue-chip NFT collections have dropped by 40% to 50%, including CryptoPunks and Bored Ape Yacht Club.
According to NFT Price Floor data, the floor price of Ethereum NFT collection CryptoPunks has fallen by 29% compared to the lowest point in the market last year, which was already considered quite severe 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 significant market pressure.
However, renowned NFT collector Daniel Maegaard states that despite the waning enthusiasm after the market peak in 2021, most NFT collections continue to sell or maintain stable prices. Maegaard also mentions that he recently sold some NFTs from the art market, including works created by digital artists XCOPY, Hackatao, and Coldie, which represent high-quality and artistic pieces that are still in demand in the market.
Exploring the “Application” of NFTs Continues
In fact, measuring the decline in interest and appeal of NFTs based solely on prices may not be fair, considering that NFT technology is now more focused on real-world “applications” rather than the popular “avatar-style” NFTs of the past two years.
For example, in terms of tokenizing real-world assets, NFTs can represent the liquidity of a particular product, such as real estate, bonds, carbon credits, and commodities. In this case, NFTs are no longer just symbolizing identity as avatar-style tokens, but rather serving as credentials 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 instance, the Web3 data asset platform EchoX introduced “Creator NFT Digital Stamps” at the SusHi Tech exhibition in Japan, preserving nostalgic digital footprints in the form of NFTs on the blockchain for permanent ownership by attendees. In addition to their commemorative value, these pieces of information can provide other brands, such as restaurants and hotels, with a better understanding of wallet holders’ interests, enabling them to offer more personalized services.
Moreover, NFTs have become a solution for the fashion industry. The European Union has included “digital product passports” as part of its strategy for sustainable and circular textiles, and has called for the mandatory use of digital product passports for textile sales in Europe by 2030. Using blockchain and NFTs as product digital identity cards can comprehensively record information such as product origin, material composition, supply chains, sustainability, and recyclability, while also preparing for regulatory compliance and addressing consumer concerns about the authenticity of luxury goods.
The scope of NFT applications is rapidly expanding, going far beyond the original concept of avatar art. From digital identities and membership management to ownership of physical assets, the potential and application scenarios of NFTs continue to expand.