Non-fungible tokens, or NFTs, took the crypto space by storm in 2021. Growing interest in these digital collectibles resulted in record trading volumes in August, with individual NFT sales regularly topping $ 1 million.
However, with so many NFTs available in the market, it can be difficult to determine which unique collection is worth the high price tag. It’s also important to note that while NFTs are becoming mainstream, they are directly related to the crypto ecosystem and are therefore prone to market volatility.
For example, the data shows that the total volume of NFTs traded in the top markets declined in early September, around the same time that Bitcoin (BTC) fell below the $ 43,000 mark.
Discover the value behind much sought-after NFTs
Although NFT trading volume continues to decline this month, high-demand projects like CryptoPunks and EtherRocks are still seeing strong sales. While both were among the first works of art on the Ethereum blockchain, Andrew, the founding marketing director of the Stablecoin project Reserve.org, told Cointelegraph that he believes EtherRocks in particular will continue to appreciate in value because only 100 pieces will be made. “Punks, rocks and kittens are all classic 2017 ‘art’ of the Ethereum cryptocurrency. However, there are thousands of kittens and dogs and only 100 rocks. “
Based on Andrew, Snowfro, founder of the art platform NFT Art Blocks, told Cointelegraph that CryptoPunks generally operates independently of the overall market. “There were only 10,000 of them, and in the end it was clear that over 10,000 wanted one, so there will likely always be a strong interest in punks,” they said.
Bought EtherRock 73 for 790 ethers ($ 2,607,584.60)
10 hours 50 minutes ago (September-July 2021 20:03:49 + UTC)
– EtherRock Prize (@etherrockprice) September 8, 2021
Due to the limited number of CryptoPunks and EtherRocks on the market, owners of these NFTs may also be more reluctant to sell. According to Andrew, EtherRock owners will most likely never sell just because they want to be a part of crypto history: “One of the reasons Van Gogh pieces are so valued is their historical significance, their story. The same can be said about the historical significance of EtherRock. In return, Andrew stated that EtherRock NFT owners immediately became part of an exclusive club, which also sparked the price panic at EtherRocks: “The ultimate logic for me is that of three. In 30 years, the NFTs created in 2017 will be extreme.” valuable. Almost like ancient art. “
From experience, Fungibles, CEO of Greenleaf Ventures, told Cointelegraph that he purchase His EtherRock after receiving a personal message from social media expert Gary Vaynerchuk about the project:
“Back then there were only three stones that were sold for 8.5 ETH each. I already have a good feeling about the project, as it has existed since 2017 and only 100 rocks have been created so far. I pulled the trigger and then tweeted about why I bought a $ 24,000 brick. “
In addition to the rarity and history behind the project, Fungibles mentions that EtherRocks also makes the perfect meme: “If this project is successful, it shows that there is something beautiful about it that looks terrible to the last possible zero. That is what makes perfect . ” and collector memes. “
Fungibles also suggests that some of the most sought-after NFTs today are also giving owners access. In particular, he stated that owning EtherRock gives individuals access to exclusive meetings around the world while also allowing the group to vote on certain things that can help increase the value of EtherRock over time: “Communities come for this token around together, which means gaining access to certain things. For me it’s a long-term investment. “
Anthony Scaramucci, founder of SkyBridge Capital and SALT, told Cointelegraph that SkyBridge has just announced the launch of Flatter, an NFT platform that combines exclusive experiences with coveted collectibles. According to Scaramucci, Flatter aims to introduce traditional collectors to a wider market where they can experience digital art and experience in a unique and fun way: to happen. “
While the platform is just getting started, Flatter has the potential to showcase the various opportunities NFT offers traditional investors, especially as established art collectors begin to get involved. During SkyBridge’s annual SALT conference on the NFT panel, Noah Davis, expert and director of digital art and online sales at Christie’s, mentioned that many prominent art collectors had participated in Christie’s Andy Warhol NFT auction this May. Davis noted that three of these five collections went to world-class art buyers, suggesting that there is a shift to NFTs in the real world.
Too much supply, but too little demand?
While the NFTs in high demand may have certain properties, a large number of new NFTs flood the crypto market every day. But even if these NFTs are characterized by rarity, unique features and accessibility, the question remains whether the oversupply exceeds the demand. In addition, in this case, certain NFTs lose value over time.
Jason Lau, chief executive officer of the Okcoin crypto exchange, told Cointelegraph that NFTs could at some point be created by anyone with internet access, but a much smaller number who would be interested in owning them.
“In the end, supply will outweigh demand. This is very similar to any other innovation-based economy. As far as NFT is concerned, we are still in the early stages and are being researched extensively by both the developers and the owners – how we will ultimately achieve equilibrium remains to be seen ”.
Snowfro disagrees, however, and notes that “too much on sale” is a counterintuitive concept if hundreds of artists want to showcase their work in a way that has never been done before.
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In terms of depreciation over time, Lau points out that there are many similarities between NFT and traditional art. Since supply is likely to outweigh demand, he believes that some NFTs will inevitably decline in value while others will increase in value as new creators and experiences gain popularity.
Santiago Roel Santos, a decentralized financial investor, added to Cointelegraph that while not all NFTs will hold their value, he hopes the next Picasso will emerge from the movement over NFTs and have a strategy. But even with the loss in value, Fungibles remains optimistic:
“There will be a bear market and certain NFTs will be fewer than now, but this will also allow new buyers and EtherRocks will change hands. I think there will always be a market, regardless of the price. “