29/03/2024 Can NFTs make me money in 2024? Why some still can, but many no longer do

UAE analysts examine relevance, profitability of NFTs after sales peaked in 2021.

20220619 nftNFTs have seen incredible returns on investment, with rare and sought-after pieces of digital art being sold for big profits. he reality, however, is many NFTs stay unprofitable.

Image Credit: AFP

Dubai: Global sales of non-fungible tokens (NFTs) have been consistently falling ever since the once-popular investment medium reached a peak in late 2021, mostly as collectors have been spending lesser money on digital artwork. So are they still relevant or as profitable as before? Let’s find out!

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“After digital art and collectibles were evidently transformed with NFTs, there was an investment boom. If you are an artist, collector, or investor, the NFT landscape provided you with numerous opportunities to generate income,” said Jaden Knowles, a digital asset trader in Dubai.

“NFTs have seen incredible returns on investment, with rare and sought-after pieces being sold for big profits, and some NFTs can still offer a unique way to diversify your investment portfolio if you have already invested in other digital assets. The reality, however, is many NFTs stay unprofitable.”

How do NFTs work?

An NFT is simply a unique and non-interchangeable set of numbers or unique data stored on a digital ledger, which can be used to uniquely code-stamp digital files such as photos, videos, and audio.

Even though NFT is defined as an unique code, the image or art associated with the number is also referred to as a NFT.

NFTs still showing signs of life, interest

Some NFTs still show signs of life and interest among businesses and consumers, with certain high-value brands like the Premier League, Louis Vuitton and McDonald's, issuing NFTs in 2023 that proved profitable later on with prices soaring since.

“Only time will tell if the NFTs that are priced high right now will cost just as much or more in the years to come. While I believe its underlying technology will fuel a future for NFTs, several other experts don’t see growth for most NFTs,” added Knowles.

Although revenues of NFT marketplaces are still expected to see double digit growth, rising by 41 per cent year-over-year to $2.37 (Dh8.70) billion in 2024, the market is losing its momentum, and this trend is set to continue in the following years, data from analytics site AltIndex.com showed.

Growth rate to drop steeply in five years

“The annual growth rate in the NFT market is expected to drop to only 2.6 per cent by 2028 indicating significant cooling of investors' appetite after the 2022 ‘crypto winter’, which was a period of depressed asset prices in the cryptocurrency markets,” the website report revealed.

Despite the obvious negative trend, revenue in NFT marketplaces, the number one spot for people looking to trade or invest in these digital assets, is still expected to grow double digits, though much smaller than in previous years.

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According to NFT market tracker NonFungible.com data, total NFT sales recorded on some platforms generated an aggregated value of $245 (Dh900) million on March 20, one-third of the value seen on the same date last year, while the total number of sales plunged from nearly 200,000 to only 52,000.

“Despite the obvious negative trend, revenue in NFT marketplaces, the number one spot for people looking to trade or invest in these digital assets, is still expected to grow double digits, though much smaller than in previous years,” the tracked noted in its latest report.

NFT market to continue losing momentum?

A survey by market database Statista indicated that NFT marketplaces will be $2.37 (Dh8.70) billion in 2024, which is 41 per cent more than last year but only half the growth rate seen last year and 1,000 times less than the rate reported in 2021, the record year for global NFT sales.

Statista expects the market to continue losing its momentum in the following years. In 2025, the revenues of NFT marketplaces are forecasted to increase by 21 per cent to $2.87 (Dh1.5) billion, only half the growth projected for this year.

Statistics also show that 2026 will bring less than 10 per cent annual growth in the NFT space. Although the revenue of NFT marketplaces will increase to $3.36 (Dh12.4) billion by 2028, the annual growth rate is expected to drop to only 2.6 per cent, or thirty times less than last year.

Active NFT wallets plunge 72 per cent

One of the reasons for such a poor market projection, the above reports cite, is the constantly falling number of active NFT wallets and people willing to invest in NFTs. Last week, 25,700 active wallets were recorded, 72 per cent less than in March last year, according to NonFungible data.

The number of unique buyers plunged by 78 per cent in this period, falling from over 63,100 a year ago to 13,500 last week. Statistics also show the NFT market counted 15,200 unique sellers last week, or 67 per cent less than in the same month a year ago.

Bottom line?

What do the higher number of NFT sellers prove? Knowles agrees with the industry forecast indicates that lesser sellers imply more supply than demand in the NFT space.

“A steep drop in NFT sales will not only cause NFT owners to lower their pricing, but this will result in a further drop in NFT market value in the coming years,” he added. “That’s only the beginning for the market to hit rock bottom – although that may still be a decade or two away.

“The bottom line for potential investors is that the value of NFTs will stay subject to rapid changes due to varying market demand, and the popularity of the asset. Investing in NFTs has the potential to cause large fluctuations in value, which can pose a risk for those who are not well prepared.”

Arts

https://gulfnews.com/amp/your-money/cryptocurrency/can-nfts-make-me-money-in-2024-why-some-still-can-but-many-no-longer-do-1.1711638992430

Interesting NFTs
Who is Satoshi Nakamoto?
"Who is Satoshi Nakamoto?" is dedicated to the mysterious creation of Bitcoin, and acts as the showcase artwork within Javier ArrĂ©s’ exploratory series "Bitcoin, The Origin". "Who is the creator of Bitcoin?" The artist, ArrĂ©s, explores this question, and the feelings of doubt and mystery that accompany it, through his unique artistic language. An unknown, an enigma. It should be remembered that the name Satoshi Nakamoto is a pseudonym of Bitcoin's author or authors and gives us little insight into its true creator. For this Visual Toy, ArrĂ©s uses the signature claw machine, his famous half-operation, to symbolize our collective ignorance and unconfirmed belief: As soon as it has the stuffed animal within its grasp and appears to have solved the puzzle, the animal escapes again, and again. At present, there are three more public and studied possibilities who are either believed to be the creators of the currency or who directly claim the creation of it. It may be all or none of them, yet these three personalities leave us clues which are an important part of this interesting enigma. For this moment, it will remain unknown... In this artwork, ArrĂ©s elevates the claw machine from the apparatus, to an iconic pop art object serving as an important element to the Bitcoin creation narrative. Action is everywhere, with each movement serving an iconographical or metaphorical purpose related directly to cryptocurrency: Various ups and downs, roller coasters, mining points, robot, coins and more speak to a sense of hope, risk, mystery, randomness and possibility of pay out. Hundreds of manically thought out details make this creation one of the artist’s most complex Visual Toys to date. ------- "Bitcoin, The Origin" is a set of two Visual Toys, titled "Who is Satoshi Nakamoto" and "It’s Alive!" which reflect and explore the mystery and enigmas behind the creation of Bitcoin. ArrĂ©s presents these proposals to us in his signature style, full of iconography, fantasy, maniacal animations and a panoply of details (both subtle and overt) which simultaneously fascinate, hypnotize, and narrate this historical milestone through the singular vision of the artist. Through this series, ArrĂ©s freezes a crucial moment of cryptocurrency history, taking a still photo under his vision and turning it into two unique crypto artworks. ---- More info about Javier ArrĂ©s: https://javierarres.com/about.html
CryptoPunk 5577
By C352B5
Formless Magic
SUPERPLASTIC (EST. 2017) X STICKYMONGER (B.1979) Formless Magic smart contract address: 0x066f2D5ead7951F0d0038C19AffD500B9F02c0e5 token ID: 7 wallet address: 0x06cAeb8090e2E7553BdFcB46e48f040FC5131afb single-channel video 00:00:06 seconds (1080 x 1080 pixels) Executed in 2021. This work is unique and is accompanied by a non-fungible token.
The Moth Catcher
In this psychologically bed-headed portrait, a creature sets in a trance; his eyes devolved and vestigal, his third eye open but hardened and in a form resembling a Sharingan. The imagery therefore expresses an awareness existing in corporeal introspection. The creature’s mind sprouts, on the left side, an emerging face, grinning. To the right side of the head, red tentacles and fingers intertwine–a collaboration of invertebrate and vertebrate consciousness cooperatively handling paint brushes of the sort used to build an oil painting. The neck and throat bristle with random thorns, as from a rose or the upper portions of a beak sprouting from its flesh. The neck itself disassociates into layers of membranous material, terminating upon an abstracted base of convoluted forms composing its body. The nose is virtually non existent, more a sinus reiterative of the shape of the third eye. Set against the exposed teeth peering out of thick, meaty cheeks, a skeleton-like impression results. That impression sets behind a visceral set of lips and tongue, which is the creature’s prime seat of awareness. Sensual, organic, the tongue organ hangs, meaty, and with consciousness of a sea cucumber. It illuminates at the tip, drawing the attraction of a nearby moth–with mystery of purpose.
Shinobu-zuri, pages from an erotic illustrated book (pages 7 and 8)
Katsushika Hokusai (1760-1849) Shinobu-zuri, pages from an erotic illustrated book (pages 7 and 8) 1830 - Japan