Who said it had gone anywhere? Non-fungible tokens (NFTs) have actually been causing a stir this week, with a buyer increase of over 105% and people like Donald Trump selling more NFT collections for millions – there’s more news than you think. Below, we’ll essentially walk you through the lifecycle of NFTs.
The Dawn of NFTs
If you were going to buy NFT originals, the dawn of NFTs was the time to do it.
Mid-2010 is where they made their first appearance, although it wasn’t until 2017 that they gained significant attention.
The NFT ecosystem owes its rise to Ethereum-based projects like CryptoPunks and CryptoKitties. Alien Punk #5822, costing $23.7 million at one point, became the most well-known collectible, with a set of 10,000 created. It might sound insane for digital art to be valued at that much, but it was even crazier back then.
The idea behind NFTs was revolutionary: they allowed for the ownership and verification of unique digital assets on the blockchain. The art aspect was something people could relate to more than a coin they never saw. Unlike cryptocurrencies like Bitcoin, which are fungible and identical to one another, NFTs are one-of-a-kind assets. This uniqueness made them perfect for representing ownership of digital art, music, virtual real estate, etc.
Developers and creators began exploring new ways to leverage NFTs, creating endless marketplaces and platforms where users could buy, sell, and trade.
The foundation was set, and the world was about to witness the explosion of NFT hype.
The NFT Hype
The NFT market exploded in 2020 and 2021.
The pandemic was (surprisingly) the most significant factor: people spent more time online, exploring new digital trends and investments. Decentralised finance (DeFi) then came about with an endless list of digital wallets and platforms for people to store digital assets that the market couldn’t help but explode.
It was in March 2021 that the NFT market reached its peak when a digital artist known as Beeple auctioned his work called Everyday: The First 5000 Days for an enormous $63.9 million as an NFT at Christie’s auction. After that, NFTs got global recognition and became a subject of debate among artists, VIPs and investors. Everyone wanted one.
Social media platforms like X (Twitter at the time) and Clubhouse provided a space for the NFT community to grow and thrive. If you saw the NFT hype on X, you’ll know how crazy it got.
Where They Went
Like many speculative markets, the NFT craze eventually faced a reality check.
In mid-2022, the market started to cool significantly. The decline in cryptocurrency prices was not helpful, and this directly affected NFTs. Meanwhile, Ethereum and other major crypto coins were reduced, making many NFT buyers lose out.
This happened against the backdrop of multiple project launches, with 30,000 such NFT items on sale at one particular time. It was like a market saturated by low-quality NFTs that were cash grabs; it led to buyer exhaustion too.
Scams and fraudulent projects also crept in, further eroding trust. Several high-profile rug pulls, like the Baller Ape Club Rug Pulls and scams hit the media, where developers would disappear with investors’ money after selling NFTs.
Are they returning?
It’s not all doom and gloom; it’s simply facts and history. And history doesn’t mean the NFTs aren’t returning. We gave you the statistics in the introduction.
Recent data suggests that the market is making a comeback. The new surge indicates that interest in NFTs is far from dead and that the market may be on the verge of a new growth phase.
With the overall cryptocurrency market showing signs of recovery, it’s helped restore confidence among NFT investors.
High-profile figures and projects continue to draw attention to the space. Former U.S. President Donald Trump recently earned over $7 million from his NFT collections. Big names mean new big interest.
The Biggest NFT Sales Ever Recorded
The biggest NFT sales in history show the immense value that digital assets can command.
The merger – $91 million – was the most valuable NFT ever sold. Beeple’s Everyday: The First 5000 Days comes in as the second most expensive NFT ever sold, with its $69.3 million price tag still turning heads. This sale broke records and solidified NFTs as a legitimate form of art and investment.
CryptoPunk was a massive collection that made massive amounts of money. You’ve got the CryptoPunk #7523, which sold for $11.8 million, and the sale of a collection of 101 Bored Ape Yacht Club NFTs for $24.4 million at Sotheby’s.
There are other high-sellers, like Human One and Clock, making $28 million and $52 million, respectively.
While these sales are exceptional, they highlight the potential for NFTs to continue being a valuable asset class. Do you think we will see more record-breaking sales soon?
The journey of NFTs is a wild one; no market has exploded and crashed as rapidly as NFTs. Yes, some people will argue that the initial hype will never be the same, but we think it will. You can’t argue with the numbers or the potential of NFTs, and people are more interested in digital assets again.
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