After a huge surge in popularity in March and exploding prices, we are already hearing a lot less about NFTs. Is the non-fungible token market a speculative bubble destined to die? Not so fast.
$ 69 million for a virtual work of art: in March, the sale of an NFT by artist Beeple had set a record. NFTs, non-fungible tokens (non-exchangeable tokens) which allow digital files to be authenticated and guarantee their owners that they have a unique copy in their possession, have created a real art market.
Popularized by the announcement of the sale of the very first tweet put online, then by successive multi-million dollar sales and the creation of numerous sales platforms, NFTs have been ripping themselves off at gold prices for months. Before the market collapsed 90%. So, is this the end of NFT?
What is happening with NFTs?
According to the cryptocurrency site Protos, the peak occurred in May, when $ 102 million worth of NFT was sold in a single day. And since then, the speculative bubble would have exploded: at the beginning of June, it sold only the equivalent of 19.4 million dollars in NFT in one week. A dramatic drop in the market.
The Nonfungible.com site, which aggregates NFT sales data, also shows that the market is declining. The number of sales fell from more than 48,000 per day in March to 19,500 in mid-June, and the number of active cryptowallets rose from more than 20,000 at the start of NFT’s popularity, in March, to 9,600 in early June.
No doubt: the NFT market has lost its attractiveness. But are we all done with non-exchangeable tokens? Not sure. According to some experts, the market for NFTs is still there, it’s just not quite the same.
Lindsay Howard, an executive at Foundation, one of NFT’s biggest sales platforms, believes there is still a future for the market. Asked by the English-speaking media Quartz, she even explains that this drop was expected. ” We expected the market to change, but we were sure collectors would continue to follow the artists on our platform. “. The manager claims to see the emergence of a ” second-hand market »NFTs, where works are sold for 200% more than their initial price.
This tendency to buy NFTs from ” second hand Is found across all platforms. ” The size of the used NFT market has increased dramatically over the past three months », Explains the site specializing in cryptocurrencies Decrypt. ” As of March, this market accounted for 36% of all NFT sales on SuperRare, NFT’s second largest selling platform. “. A phenomenon that is only getting stronger with the growing popularity of a certain type of very specific piece: those called ” to collect “.
From works of art to collectables
While early in the popularity of NFTs, the emphasis was on virtual works of art, the most prominent pieces today fall under the category of ” collectible coins “.
These collectibles are mass produced, and are in a way the equivalent of modern Panini stickers. To take a more concrete example, it is as if the works of Da Vinci were no longer too fashionable, and that everyone was snatching up Les Crados cards for thousands of euros. The most popular collectibles right now are the Cryptopunks, a collection of 10,000 pixelated and unique little characters. According to Nonfungible.com, 5 of the 6 most expensive NFTs sold in the week of June 17 were Cryptopunks.
In the case of Cryptopunks, the 10,000 collectible coins having already all been purchased, potential buyers are forced to go through this famous second-hand NFT market, and bid to acquire them.
Switching between models doesn’t change much for buyers – it just shows that their interests are not quite in the same place. But this is not at all trivial for the NFT market, nor for creators: the most popular players are no longer the same.
Above all, these changes show that, despite the explosion of the NFT bubble and the drop in interest, the market is not dead. He just tightened up around the people most motivated by the project. ” The smartest collectors have realized that some NFTs will have a lot of value in the future. », Explains Decrypt. ” People who truly understand NFTs will continue to do so. “