Since the market boom in 2021, a lot has changed in the NFT sector. Nonfungible tokens (NFTs) have become one of Web3’s most active and prominent features during the past two years. NFTs’ ascent was swift in 2021, but it hasn’t been very stable afterward, and it appears to have abruptly declined in 2022.
Why NFTs Boosted in Popularity in 2021
Collectible art projects and the video gaming business were two of the NFTs’ most active markets in 2021. New game types, like blockchain-based play-to-earn games that give players in-game advantages, have increased due to the advent of NFTs, which has ushered in a new era of video gaming. By selling in-game assets on NFT platforms like OpenSea, users purchase in-game support for the first time and potentially benefit from doing so. The gaming industry helped NFTs to step into the mainstream due to their massive popularity.
The enormous success of picture-for-proof collections like the Bored Ape Yacht Club (BAYC), which saw the price of a rare golden ape jump from $300 to up to $3.4 million, seemed to indicate that fear of missing out also played a significant part. There are typically two categories of adopters: those who recognize a trend’s potential and are prepared to stick with it and those who join in just because everyone else is. The same is true for NFTs.
How NFTs have fared in 2022
NFT sales significantly increased in the first half of 2022, with crypto users spending $2.7bn to mint NFTs. After an excellent start to the year, the NFT sector has experienced severe setbacks. On OpenSea, the cheapest Bored Ape recently sold for 73 ETH. The floor price for BAYC dropped under $100K earlier this year before rising again.
Current Market Conditions
Experts predict that the value of NFT projects will fluctuate because of the market’s prevailing conditions. According to Yard Hub CEO Yaroslav Shakula, “NFTs have undoubtedly been impacted by the negative market. The global political and macroeconomic environment will determine what happens next. One may anticipate volatility in NFT values that all tech stocks and risky assets depreciate against the U.S. dollar. NFTs still have a lot of visibility despite these low volumes.”
Many people have noticed a sharp rise in the number of people using monkey, bear, or other NFT images as their profile pictures on Twitter and Instagram. Twitter stated in January 2022 that users would be allowed to use NFTs as their official profile images via Twitter Blue. When an NFT is connected, users of Twitter’s premium, subscription-based edition can connect their wallets and upload a hexagon-shaped profile picture. Meta immediately adopted Twitter’s strategy and added a similar function for Instagram and Facebook.
Celebrities are still active in the NFT market; most recently, Snoop Dogg collaborated with Mobland, a mafia-themed metaverse, to develop virtual weed farms. The weed farms were created as a component of NFT 3.0, the third NFT generation.
The future of NFTs
Not only do some business experts believe that the NFT market will survive, but they also believe it will keep growing and play an increasingly important role in the digital economy. According to a report, the NFT business could be worth $231 billion by 2030. The video game, music, art, and digital collectible industry’s continued adoption is the reason for this.
Experts’ Stance on NFTs
In the upcoming years, experts predict that people might soon be able to perform their regular tasks in a virtual environment while utilizing virtual resources. This will signify the construction of a metaverse in which every object is converted into an NFT token. Even though it’s unclear how this will fit in the “real world,” the revolution is already becoming a reality.
Some experts predict that NFTs will become widely used soon. According to AAG CEO Jack Vinijtrongjit, “NFTs are transitioning from merely being a collector and speculative tools to real-world use cases, such as identity and customer relationship management. Universities are already distributing NFTs in exchange for diplomas, while businesses like Starbucks use them to replace membership cards. It will cause NFTs to transition from the fringe to the mainstream.”
Despite certain businesses already offering digital assets as part of blockchain games, this technology has not yet been extensively adopted in the crypto and gaming industry, leaving many experts skeptical about how, or even, it will catch on in the mainstream industry.