NFTs are done
Stop me if you are surprised by this.
It appears that the appetite for spending thousands of dollars – hell, millions of dollars in some cases – on artwork of questionable quality that you can’t hold, look at in person, or hang on your wall, has dried up.
So to has the desire to buy sneakers that have the human blood in the insoles.
Apparently, also, sports fans are starting to grow weary of spending their entire paychecks on “owning” basketball highlights, as well.
Shocking, I know.
Perhaps everyone learned that they weren’t actually owning anything all at one – the wonders of the right click suddenly dawning on them. Who knows, but something happened.
I’m referring to the bizarre, interesting, but potentially worthless collectible NFT world.
Reports today are showing that the last month has been a rough one for the space. What’s happening isn’t so much of a dip as it is a full on collapse. The value chart looks like a waterfall, and not one of those gentle waterfalls that you might float over on vacation. This is Niagara Falls stuff.
Here are the details: on May 3 – that’s exactly one month ago at the time of this writing – there was $102 million USD of NFTs sold in a single day. The vast majority of those sales were in the collectables space, equalling about $100 million. The seven-day sales figure around that May 3 high water mark was $170 million.
The current seven-day sales is $19.4 million. That represents a near 90% collapse in a single month for a marketplace that didn’t really exist in any meaningful way a year ago. And, most of the $19.4 million was on the secondary market, as well.
Like, there are trends and then there are trends, right?
Look, it’s kind of funny. Not to be harsh, but if you have enough money to spend $69 million on digital art you can likely afford to lose it. They bought it for the status of “owning” it, not necessarily as an investment. And, if they did think that, well, trade (or buy NFTs) with caution, right?
Markets correct and this market is doing just that. Does that mean that NFTs are worthless?
I mean, it depends. First of you have to define what exactly you are talking about when you are referring to a NFT. I can’t predict the future, but I don’t think digital artwork is going to be worth millions in hundreds of years. Then again, people weren’t lining up to buy Vincent van Gogh paintings when the artist was alive.
Now, people line-up to look at them in museums.
Regardless, as I’ve written about in this space before, the real value of NFTs is the technology that backs it. It’s not going away and, in many ways, a bust in the trendy factor might be for the best. Instead of focusing on the silliness in the collectable NFT market, or the extravagance of elitists spending stupid amounts of money on art, those that believe in the blockchain technology behind it can get down to the business of finding useful applications for it.
And, there’s nothing trendy about that.