As the leader of blockchain out of the circle, will NFT continue to run wild after a temporary adjustment? Or is it just a stumble?
As the cryptocurrency market cools, the NFT space seems to be starting to cool down along with it.
Nonfungible.com reports that since May, overall NFT sales have plummeted 95% from a high of $176 million to $8.6 million. As of June 15, weekly sales were down 95 percent to just $9.2 million.
This means that volume is now largely back to the starting level from the beginning of the year, and it appears that the NFT frenzy is calming down.
As the leader of the blockchain out of the circle, will NFT continue to run wild after a temporary adjustment? Or is it just going to stumble?
NFT crypto market’s exit from the circle
It is indeed an unexpected and reasonable thing for NFT to lead the blockchain out of the circle.
Although the well-known Bitcoin and other digital currencies have continued to set new price highs in recent years and become the resident hot topic in the financial circle, they are always the game of a few people and have not really come out of the small circle of blockchain.
In fact, many people began to pay attention to NFT is from a message on Twitter on March 6. At the time, it appeared that Twitter CEO Jack Dorsey wanted to sell his first tweet, posted in 2006, as a non-homogenized token, NFT.
The next day, Sina Estavi, CEO from digital currency trading firm Bridge Oracle, then offered $2.5 million to buy it. It was a deal that caused quite a stir at the time.
It is due to the growing celebrity effect that more and more mainstream artists are choosing to tie their works to NFT.
One of the most successful NFT artists is Mike Winkelman, known as Beeple, whose artwork sold for a total of $142.7 million, and the price potential of NFT artwork was vividly displayed to collectors around the world.
According to the NFT Art Market Report 2021 2020 in the global NFT has grown to more than 200,000 active accounts, four times more than in 2017, and the number one active account ranking is the digital art category. This year alone, NFT art sales reached $437 million through April.
The NFT market boom provides opportunities for artists to expand into new markets and create new profit models.
Traditional Industry Enters NFT
The letters N-F-T have now swept through the worlds of finance, music, fashion and sports.
Because NFT itself comes with financial attributes, more and more new trading platforms, lending agreements and their derivatives are starting to emerge.
On June 9, LVC 9, LINE’s virtual currency business, announced that it would launch an NFT marketplace.
On June 16, according to JP.Cointelegraph, Japanese financial services group GMO announced the establishment of a new company, GMO Adam.
The music industry, which is rooted in the “fan economy,” has established links with NFT.
On May 25, singer A Duo released her new song “WATER KNOW” on her personal Weibo account. The entire song was digitally encrypted using NFT technology, and the cover and song’s attribution rights were auctioned off for the public good, eventually selling the work for 304,271 RMB.
On June 17, Foundation tweeted to announce that Chuck D, the founder of legendary American rap group Public Enemy, known as the most successful hip-hop group, officially opened a Foundation account and has cast NFT works.
Of course, in addition to the fans, the fans’ obsession and enthusiasm for their idols have also led NFT to successfully break into the sports circuit.
With a LeBron James (Lebron James) slam dunk hanging in the NFT market at a high price of $100,000, the NBA’s all-stars have also joined the NFT feast. It is reported that the single-day sales of NBA Top Shot, an NBA digital collectibles platform, have soared 140 times this year in just one month, and individual NBA Top Shot star cards have sold for record prices throughout January.
In addition to the NBA stars to push the wave, the fashion circle of luxury merchants to join, but also to make the NFT honor the “C” position in the fashion circle.
With Richemont and LVMH both reportedly interested in NFT, and Gucci hinting at a sale, it seems only a matter of time before other companies in the industry join the ranks.
The “black” NFT bubble
Despite the obvious advantages of NFT in all major areas and the huge potential for growth, it is undeniable that several major issues need to be addressed in order to achieve a full NFT rollout.
First, is the digital work represented by “Every Day: The First 5,000 Days” really worth that much? It started at $100 and sold for a final price of $69.34 million.
With such an exaggerated price, even Beeple himself said that the NFT price was “definitely” a bubble.
Even Beeple has long been recognized as a pioneering digital artist. But from the aesthetic point of view alone, the painting does not show a strong appeal, and its estimate should not be so high, it is difficult to say that it is not tainted by the light of the bubble.
On the other hand, according to statistics, most of the works that NFT has fetched high prices so far come from the well-known big V creators in the circle, while few works are sold by the newcomers to the industry.
Secondly, at the level of compliance, the high similarity between NFT and ICO (Initial Token Offering) makes it also subject to many questions. Because the value of NFT works is generally high, investors naturally go to buy NFT interests in order to gain ownership of them. This is very similar to the past hype ICO set-up and involves many regulatory issues.
The SEC has launched a lawsuit against Ripple (the issuing company of the token XRP) and has initiated judicial discussions based on the case, which may be used as an example to develop guiding principles for the entire cryptocurrency industry, although nothing has been finalized yet.
However, the future direction of regulation is still a major variable facing the NFT.
Meanwhile, in terms of trading, the process of trading, creating and verifying an NFT is accompanied by high energy consumption and low efficiency, which is particularly problematic given the political correctness of the “carbon neutral” issue being discussed globally.
Previously, Musk announced on Twitter that Tesla was suspending bitcoin payments for cars, citing the high energy consumption of bitcoin as an excuse. Famed digital artist Memo Akten has also analyzed 18,000 NFTs and found that their average carbon footprint is equivalent to the electricity consumption of an EU resident for more than a month. More precise scientific data shows that an average NFT transaction releases about 200kg of CO2, which is due to the large amount of electricity consumed by Ether.
The potential “white” of NFT
Although the current market for NFT is highly speculative, with a large price bubble, and compliance issues are still inconclusive.
But as BNP Paribas researcher Nadya Ivanova says: “The important thing that people need to understand about the NFT market is that it is very new. The market is still going through different market cycles of determining the true value of things.”
In the future, as more NFT applications come to fruition, it is likely to become a key driver and building block for many industries to transform their digital economies. For example, NTFs could intersect with other areas such as decentralized finance (DeFi) to introduce new derivatives markets, products and services, such as “fragmented NFT” and collateral NFT.
There is the promise of creating a virtual reality on the blockchain that will bring greater change to the way the public lives.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/nft-market-slippage-nft-development-of-white-and-black/
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