NFT Market

NFTs are soaring by gaining new patrons every day while cryptos continue to tumble down.

If NFTs appear to be making a buzz all of sudden in 2022, probably you are living under a rock. It has been spreading its wings and maturing like an underbelly of the crypto market all through 2021. NFTs are basically non-transferable units of data that are traded on a blockchain platform, which is a kind of digital ledger. Some of the bizarre trends of NFTs are encouraging people to invest in the crypto and blockchain market this year. NFTs have become a sort of appendage to crypto-investments and a way to explore the digital art arena. In fact, NFTs have become more popular with crypto investors who are more of crypto-traders than art enthusiasts. As of now, it is not much clarity as to why NFTs are gaining immense popularity, while Cryptocurrencies are witnessing major setbacks.

NFTs have been in the market since 2014 but they have been trading high only in the last couple of months. While the NFT market is pegged at US$2.5 billion in the first half of 2021, NFTs sale in the month of July alone is over US$1.2 billion. This rate of growth was not seen before, even during the pandemic. Even major brands like Coca-Cola took to the NFT market to sell a four-piece collection and donated to proceeds to Special Olympics International.

According to experts, the reason behind NFTs gaining so much traction is newly gained fandom in masses for digital art via the NFT platform, which is the one-of-kind art gallery. It is making the possibility of owning art a reality, a privilege that was reserved for the wealthy earlier. NFTs is fast becoming a drool-worthy medium for digital-savvy millennials and zoomers also.


Why NFTs are worth investing in?

NFTs have exploded in popularity. After some investors made millions out of these NFTs, other enthusiasts are ready or are planning to jump on with it to get on the hype. There are many investors who believe that NFTs are a legitimate store of value and represent a shift in how the world views art and collectible assets. But sometimes, fraudsters may create just a digital image by copying someone else’s art with a unique asset address. Now, this has made several other investors question the value of NFTs. But even though some of the cryptocurrency specialists question the value of NFTs, it is still quite evident that this investment class is all set to surge in the future.

In some cases, NFTs and cryptos are almost considered intertwined. Investors need cryptocurrencies to buy NFTs, and both crypto and NFTs use the digital ledger known as the blockchain to show proof of ownership of an asset. But NFTs themselves are not digital currencies, instead, they are unique. As NFTs are becoming more popular by the day, their disparities show that cryptocurrencies and NFTs are operating in distinct markets.


Is Crypto’s fall momentary?

 According to reports, the price of Bitcoin and Ethereum, two of the largest digital assets have dropped 40% each since mid-November. In recent months, the price of Bitcoin fluctuated around US$40,000, whereas, it literally touched the moon after it soared way above US$65,000. As experts have already predicted before, cryptos undergo a cycle that involves their volatility, price surge, and value dives. Since many are hoping that this cycle will come to an end and we will again see the face of profits in the market.

But Bitcoin’s lagging price in recent weeks comes amid a continuing inflation surge, the stock market’s worst month since March 2020, and ongoing signals that the Federal Reserve will begin raising rates in order to counteract inflation are some of the many reasons why investors are quite discouraged with the condition of cryptos in the market.

Meanwhile, government officials have continued to show an interest in stronger regulations upon digital currencies, including the possibility of creating a government-issued digital currency. Ethereum’s price has also followed similar patterns as Bitcoin in recent weeks. Investors who invest in crypto and are planning on long-term investment have been drastically affected by this.


Bottom line

Although the top collections have been able to hold their values even when cryptocurrency as a whole has been taking huge hits, the NFT market has been plagued by scams and fraudsters in recent months. Crypto analysts believe that the craze of NFT will die down and after it does, cryptocurrencies and NFTs will be standing in a very similar situation.