The second half of the year 2022 has not been in favor of Non-Fungible Tokens (NFTs) because of an 83% decline, with the market facing a major meltdown in the past months and the prices dropping to below 30 ether. According to the data from Chainalysis, the weekly trading volume noted between August 2021 and April 2022 was US$750m and US$1.5bn, which falls down to US$3,894 to US$293 between 2022 and 2023
There is no doubt about its surge, with investors investing millions of dollars, but because of the scam projects and the fall of the crypto market, it suffered. They are similar to cryptocurrencies, but with the fall of NFT in the market, the price of bitcoin rose.
Even after facing the downfall, they are still seen as the gateway to fostering more transparent and accountable digital transformation and holding a bright future ahead.
According to recent studies, it is revealed that despite this current slump.
Future Of NFTs
After discussing the downfall and expected rise in the coming years, the question arises: what is the future of these Non-Fungible Tokens?
Undoubtedly, they represent the rights of your digital art and are termed as your digital assets, but as with all tradable assets, they also function temporarily as an investment. The value of these tokens should depend on how and where they are used (utility) rather than their scarcity.
By integrating the Non-Fungible Token with Real World Assets (RWAs), instant cross-border investments can be facilitated.
Also, Adidas has recently launched its Web3 artist residency, which is a well-established collaboration of art and fashion to a broader audience like investors and creators. Such initiatives are significant for the revival of the market.
Is Investing In NFT's Beneficial?
As mentioned earlier, investing in this digital art helps establish a clear chain of patronage over an asset, but there are chances of fraud, counterfeiting, and money laundering. Also, it emphasizes digital-only items, so the growth and value of the item are dependent on the demand from the collector.
Pros Of Investing
Cons Of Investing
The bottom line is that investing in Non-Fungible Token comes with its benefits and drawbacks, but in general, they should be purchased if the asset is something that interests you and has an established market too.