Average prices for NFTs drop, but the most popular ones continue to amass a substantial market capitalization.
Fizzling Out or Bidding Their Time?
They go up, and they go down. Prices for digital collectibles known as non-fungible tokens (NFTs) have come a-tumbling with the average prices dropping a good steady 70% following an all-time peak in February. “The nascent market” for these assets, as described by Bloomberg contributor Joanna Ossinger, is now facing its first challenge as prices are withdrawing.
Not even the outpouring of support by artists, crypto go-getters, and sports personalities have been able to stop the sudden change in fortunes. Some, including BNP Paribas CEO John Egan, have described NFTs as one of the riskiest assets in the blockchain space.
Are NFTs fizzling out? They are 70% lower from their February all-time high of $1,400, and following the sale of the Beeple NFTs, which sold for the eye-popping $69.3 million, no new upward trend has appeared on the horizon.
Despite the suggested gloom, CoinMarketCap argues that the 38 NFTs tracked by the firm have hit $22.5 billion in total value or an eight-fold increase.
NFTs, though, have clearly sparked interest, and they seem to be drawing support from various industries, including entertainment. With the sudden upsurge in popularity, though, scammers have been happy to cotton on and do their best to sell fake digital assets.
Beware the Scammers
As NFTs are the latest incarnation of mass blockchain technology, this means that many consumers will get burnt as regulation is probably months of catching up. A conscientious objector may say that blockchain is inherently reliable and transparent, but this doesn’t mean that a non-expert would be able to authenticate the provenance of an NFT.
In fact, University of Pittsburgh’s Chris Wilmer argued that scammers are only stretching their legs, and a lot of digital duplicates will appear, tempting consumers with plenty of disposable income to snap up the latest buzz-worthy digital counterfeit.
Do falling prices per average token and the proliferation of underhand practice mean an end to the NFT economy? Hardly so, as the pandemic has introduced a new form of ownership that transcends the physical world. In fact, many of these digital assets are proudly put on display on LED screens and showed off.
As virtual spaces become more intricate, status could soon be determined not by a purchase of an expensive watch in real life but rather by the digital assets your avatar has been able to amass in the metaverse.