Crypto commentary is nothing if not fickle, and that applies even more with NFTs. Currently, the entire NFT market is going through a dip, with the prices and sales volumes of most collections down significantly in recent days.
As an example, manga-styled Azuki items have been trading with a floor price of a little over 9 ETH, down from a floor of over 14 ETH in the middle of February. And, the highest-profile collection of all, Bored Ape Yacht Club, dropped to a floor as low as 68 ETH, from a floor that went over 118 ETH at the beginning of February.
Some collections are faring better than others, but overall, prices have dropped and there are fewer buyers. And, this has inevitably led to predictions of doom among NFT watchers, both those critical and dismissive of NFTs, but also many who are involved in and enthusiastic about NFTs.
According to the pessimistic take, NFTs are due a period of devastation reminiscent of the ICO carnage of 2018, when altcoin prices plummeted hard, with some tokens becoming worthless. In the process, the crypto landscape was purged, leaving the worst-hit investors not simply underwater, but fully dead in a watery grave.
However, this comparison doesn’t feel entirely apt. How are NFTs valued? Could there be harder NFT corrections still to come? Yes, certainly. And could the value of many projects go to zero? Yes, it’s entirely possible that no one will buy your JPEG of a llama in a funny hat.
But, at the same time, we must be careful not to inadvertently write off the underlying technology and its applications, because that is here to stay. And, when it comes to assessing individual collections, it’s time to be discerning, or at least wait and see how things pan out.
Despite the voices of gloom, it’s probable that a decent number of NFT collections will have lurching ups and downs but are now established enough within an expanding world (as in, the world of crypto and web3) to retain value over the longer term.
Looking at Bored Ape Yacht Club activity on OpenSea, you can see items listed in the 65 to 80 ETH bracket being snapped up. Clearly, for some buyers on certain collections, the current market looks less like the end, and more like a flash sale.
What’s also of interest is that even as prices have fluctuated, there has been a constant stream of news and activity indicating that NFT technology is becoming increasingly integrated into the mainstream.
On the gaming front, leading metaverse project The Sandbox partnered with long-time games production giant Ubisoft, with the intention being “to introduce Ubisoft game IP elements to The Sandbox metaverse”.
Then there’s Gala Games, a highly productive blockchain gaming studio, which announced last month that it was allocating $5 billion this year to expand its operations beyond gaming, including into music and movie NFTs.
In the music industry itself, we can find Universal Music partnering with NFT platform Curio, and Warner Music working with OneOf, a web3 company that specializes in music and sports NFTs.
And, diving into NFTs in ways which seem particularly authentic, there are sports and fashion brands such as Adidas, with its Into the Metaverse project, Nike, which acquired NFT innovators RTFKT, and Puma, which is working on several NFT partnerships.
These are all companies with clout, and the link between sneaker culture and NFT art makes sense, with both sharing certain characteristics: collecting for collecting’s sake, a fixation on rarity, endless collaborations, flashiness and the bragging rights that come from getting your hands on the almost unobtainable.
And, let’s not forget that the proposed technological transitions that garnered so much attention when markets were bullish, an online shift into web3, meaningful digital ownership, decentralization, and the emergence of some kind of metaverse, were not just empty words or imaginary visions, dreamed up while high on green candles.
These are viable tech progressions, being programmed into reality by growing numbers of developers migrating across to web3-related projects.
Where NFTs in particular differ from other areas of crypto is that so much of the NFT space is populated by creators who are from neither a technical nor a financial background. That’s unusual when we’re discussing an area that overlaps with fintech.
But, then that’s part of what makes NFTs difficult to cleanly categorize. Naysayers declare that NFTs are a scam, tulips or, at best, an in-joke. Well, some of them might be. But, a good number are something else altogether, intersecting the worlds of tech, finance, arts, fashion and gaming, and, in some cases, capable of surviving through market volatility.
The key from here is to discern what has lasting value, what makes an NFT valuable and what will disappear, and to recognize that this process of separating the two is natural, inevitable and if we really want to see web3 achieve its promise, it's beneficial.
What sometimes gets forgotten is that behind the tumultuous NFT carnival, there are builders, both on the tech side and on the art and design side. When markets crash, it’s those who keep constructing behind the scenes, because that’s what they do, who will come out stronger on the other side.
