The average price of an NFT on April 5 was about $ 1,256, a figure below $ 4,000 at the end of February, according to market research site NonFungible.com. Data from The Block, another cryptography research firm, shows a similarly large decline in both NFT prices and sales.
NFTs have been a craze for investment and pop culture for the past few weeks, which has led some to wonder if the frenzy is a market bubble fueled by wealthy, young traders with stimulus money.
A JPEG file from digital artist Beeple was recently sold for $ 69 million to Christie’s. NFTs have helped raise the price of sports trading cards. Rock band Kings of Leon released their latest album as NFT.
NFT mania has helped increase the value of the ether, the cryptocurrency network of blockchains is used for a large number of NFT transactions. Ethereum prices have risen more than 180% so far this year, an increase that exceeds the rise bitcoin price (XBT).
Shares of collecting companies, such as figurine maker Funko (FNKO) and Hall of Fame Resort & Entertainment (owner of an NFL-themed town in Canton, Ohio) have also been fired thanks to partnerships for developing non-expendable tokens. Funko announced last week that it was buying a majority stake in TokenWave, LLC, the app developer and TokenHead website that tracks NFTs. Hall of Fame Resort & Entertainment signed an alliance late last month with a marketing firm Dolphin Entertainment (DLPN) develop NFT football,
Proponents of NFT point out that each testimonial is unique and cannot be replicated, creating a scarcity value that is good for both the artists who make them and the collectors.
Funko CEO Brian Mariotti noted that in the statement on the TokenWave deal, he said the investment in NFT marries the digital and physical collecting business.
“The NFT world has to do with content,” Mariotti said.
This may be true, but the sharp and sudden rise in the value of NFTs and the more recent setback are reminiscent of some other similar historical bubbles in the market, such as the 1600 tulip craze, the fall of the dot com / technology of 2000 and bank shares and house prices in 2008.
The NFTs may be here to stay, but they may not be worth the staggering sums of money some people have spent in recent weeks.
Even Beeple, also known as Michael Joseph Winkelmann,
he joked with CNN’s Julia Chatterley in March which could be the biggest winner of what could turn out to be an NFT bubble.
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