So, you’ve got yourself a $5,000 NFT JPEG. What does it actually do?
With upwards of $100 million a day pouring into the NFT market last week and prices skyrocketing, it might not matter right now. But experts monitoring the breakneck climb of the NFT market say it will, and soon.
An analysis of the top 15 NFT projects by all-time sales shows NFTs are in a bull market that dwarfs the early spring run, which saw NFTs explode into the mainstream. Daily sales volume tipped over $100 million on Friday, up from less than $5 million in late May.
Scores of collectible NFT projects have found an audience in recent months, with cute, collectible generative art of apes, cats and seemingly every other creature under the sun selling for hundreds — if not thousands — of dollars.
Their rarity, communities and a healthy dose of rampant speculation fuel price wars, but experts say the wheat will soon emerge from the chaff as collectors want more from their NFTs. And there’s a lot of chaff.
“We’re seeing a lot of these collectible projects, multiple being launched a day, that really don’t have any utility,” said Nick Emmons, CEO of Upshot, which is building a crowdsourced appraisal system for NFTs. “They don’t provide any kind of extra value to the holder of the NFT … “I think what we’ll start to see over the coming weeks and months is the shift to value accruing (in) NFT’s that have levels of utility.”
Despite the soaring valuations, Vanessa Grellet, head of portfolio growth at Coinfund and an NFT early adopter, said she doesn’t view the current market as a bubble.
“I think as the crypto markets fluctuate, you’ll see the NFT space fluctuate, but the mass adoption that we see is unparalleled,” she said. “And so that’s why I don’t think we’re currently in a bubble — we’re at the beginning of the journey. We’re at the beginning of people discovering where we are. We’re also at the beginning of building the infrastructure. We don’t have a mature market, we don’t have mature price discovery … there’s still a lot of inefficiencies.”
Crypto Investor’s analysis also shows the NFT market, according to data from Cryptoslam.io, is already anchored by projects with utility built in.
Axie Infinity, a game about battling, breeding and collecting cuddly creatures called Axies, recently broke $1 billion in sales. NBA TopShot, Dapper Labs’ darling of the spring, has started experimenting with fan experiences tied to collecting its NFTs. The Bored Ape Yacht Club offers member-exclusive perks, like merchandise and commercial rights to their art.
To Emmons, the collectible projects that harness some level of utility will survive. Most won’t, he said.
“I think there are going to be a very small set of winners that look very similar to the massive kind of waves of collectible and Avatar (profile picture) projects coming to the scene,” Emmons said. “And what we’ll start to see happen is utility being appended onto these winning, blue-chip, collectible NFTs.”
Disclosure: Stephen Stirling is a senior reporter for the Street Crypto. He is an NFT artist that uses the platform OpenSea, and holds NFTS from NBA TopShot, Zed.Run, Robotos and Cool Cats currently valued at more than $500 USD.
So, you’ve got yourself a $5,000 NFT JPEG. What does it actually do?
With upwards of $100 million a day pouring into the NFT market last week and prices skyrocketing, it might not matter right now. But experts monitoring the breakneck climb of the NFT market say it will, and soon.
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