The decline in non-fungible token sales, which started in early May, is expected to continue through June.
Finance Magnates previously reported that, according to data from NonFungible.com, trading volume reached $170 million in the week before and after the peak of the NFT market in early May. By the end of the month, that number had plummeted to $19.4 million in NFT revenue, down about 90%.
The decline continues, according to a new report from CNBC. On the 7th of June 15th, the average NFT volume fell to $8.7 million. Compared to the market highs in early May, the new figures are down nearly 95%.
Is this the end of non-fungible tokens?
The Rise and Fall of Non-Fungible Tokens in 2021: A Brief History
This may not be the end of the NFT, but it is definitely the end of the era. After a headwind of the biggest crypto bull market in history, it made headlines when non-fungible tokens entered the mainstream in March 2021. At that point, NFTs had already existed for several years.
But never before have they captured the public’s imagination in such a great way. Investors and speculators have seen new opportunities for great success in rather new financial markets. Artists and creators see new opportunities in the digital world to monetize their work.
For some, the opportunity has paid off. Graphic designer Mike Winkelmann, also known as “beeple,” sold NFTs at a Christie auction in March for a record $69 million. Around the same time, Twitter CEO Jack Dorsey sold a tokenized version of his first tweet for $2.9 million in the same month. Grimes, Eminem, 3LAU, Lindsay Lohan and many other celebrities have also joined the trend.
However, after a while, cracks in the walls of the NFT space began to appear. Critics of non-fungible tokens have criticized the practice of issuing tokens, pointing out the potential for a heavy carbon footprint. Many small producers entering the space for the first time quickly realized that someone else had already stolen their work and tokenized it, further grieving collectors who bought the fraudulent tokens.
Additionally, reports of non-fungible tokens “disappearing” are starting to make headlines. This is because the question of what it really means to own non-fungible tokens has not been answered. Because NFT-related material is not stored in the Web 3 environment, it presents the same kind of problems as any centralized media. If your NFT-bound photos disappear from the web, you’re out of luck.
Now the hype is over. What’s next?
At first, the criticism of non-fungible tokens did not seem to have much impact on the space. However, the non-fungible token market declined as the cryptocurrency market suffered a bearish mid-May. An analyst working outside the cryptocurrency space wrote that the entire saga is another cryptocurrency fad. Novelty, interesting, and perhaps interesting, but essentially vain and hype.
However, Nonfungible’s chief operating officer, Gauthier Zuppinger, told CNBC that the NFT market movements over the past few weeks are closely related. , you will see a relative decline that basically indicates market stabilization,” he told CNBC.
And indeed, data from Nonfungible.com shows that after a 95% decline from the peak of the NFT market in early May, NFT sales are essentially continuing the slow, steady growth trend that has been trending over the past few years.
“The famous NFT, which sells for millions of dollars, is a clear sign that the market is treating it as a speculative asset,” Nadya Ivanova, chief operating officer of L’Atelier, told CNBC. “And by definition speculative asset markets are unstable and prone to exhaustion.”
“The bigger question for NFTs is their long-term value, and we think this will be important,” she said.
In other words, now that the hype is over, non-fungible tokens can continue along the path of technology discovery.
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NFTs in Virtual Reality and Beyond
The most commonly known use cases of non-fungible token technology surround concepts related to digital authenticity and ownership of the Internet as we know them, but some innovators are exploring virtual reality, an entirely new environment for NFTs.
Forbes recently reported that Space Force has partnered with digital artist companies WorldwideXR and VueXR to launch their own NFT with augmented reality capabilities. According to reports, NFTs will be accessible to owners via the VueXR app, available for both iOS and Android.
“As augmented and virtual reality technologies mature, the average person will spend more and more time in virtual environments,” Nadya Ivanova told CNBC.
Non-fungible tokens are already popular in the gaming world as a technology that allows decentralized ownership of in-game assets to become a reality. But as games increasingly move to virtual reality, NFTs could take digital ownership to the next level.
“World builders in VR are looking for ways to make the world a lot more profitable, but few companies are willing to invest money for virtual worlds,” said Dale Deacon, expert in developing immersive storytelling. VR and AR. He was talking to VRScout.
NFTs can provide a path towards real monetization in the virtual economy. “Monetizing the job of being a VR world builder will be part of monetizing the role of a world builder.”
The hype is now disappearing from the non-fungible token space, allowing VR innovators to explore use cases more seriously. “As an NFT, I am interested in AR and VR space. [because] They have practical value,” Dale said. “The hype about NFTs has made NFTs a bit “myopia”.
While NFTs may not be a panacea for VR world builders and other creative economies, they could be part of a major shift in giving creators access to new kinds of economic tools.
As Deacon explained, “what NFTs are currently shining on is not the end goal of an entire decentralized finance industry where standard banks have decent competition at once.”
The hype is over, but the real innovation continues
Beyond virtual reality, non-fungible tokens are finding new use cases in the music world and beyond.
“We’ve only seen the tiniest part of this going on,” Geoff Osler, co-founder and CEO of the NFT app S!NG, told CNBC. “Cryptocurrency is here and NFT means there is now something to buy. It’s the other side of the equation. And this will go far beyond digital art. I think the next thing is music.”
Other use cases for non-fungible tokens have been identified in identity, travel, live entertainment, healthcare, supply chain and many more industries. However, many innovations will be required for the technology to take its place in any industry in a meaningful way.
Now that the hype for NFTs seems to be over, companies and innovators who have been working to improve their irreplaceable token technology will continue to build for the future. Watch this space.