Opinion: NFT.NYC Showcases Casino Capitalism, But Do NFTs Truly Face Demise? #Speculation
NFT.NYC, a renowned event in the world of non-fungible tokens (NFTs), recently showcased a display of extravagance and exclusivity. In this edition of #hearsay, a weekly gossip column delving into the alluring side of the crypto industry, we explore the fascinating details of the event.
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In the fast-paced world of cryptocurrencies, trends come and go with the blink of an eye. Just when experts were ready to write off non-fungible tokens (NFTs) as a thing of the past, these digital collectibles that live on the blockchain have experienced a potential revival.
In 2023, as headlines screamed “NFT Bubble Burst” from every corner, a divide started to emerge within the NFT community. Some believed that the focus was shifting towards utility rather than purely artistic value. The once-promised concept of perpetual royalties for digital artists, thanks to the blockchain, was revealed to be false by Blur.
Recent data suggests a decline in NFT sales in the past quarter, leading many to declare the demise of the digital art craze. However, a closer look reveals a more nuanced reality.
Let’s take a look at the recent edition of NFT.NYC, which concluded on April 5. Established in 2018, this event exploded in 2021 due to a major bull market that saw NFT sales skyrocket to $17.6 billion. This surge was fueled by factors such as cryptocurrency prices, celebrity endorsements, and the recognition of NFTs as valuable works of art, as confirmed by esteemed auction houses like Sotheby’s and Christie’s. These events played a significant role in elevating the cultural recognition and awareness of NFTs, especially with the groundbreaking artwork by Beeple. However, critics of the cryptocurrency industry used the subsequent boom and bust cycle to portray the entire industry as a massive casino.
Indeed, in 2022, the crash in cryptocurrency prices and the financial turmoil caused by Russia’s invasion of Ukraine had a substantial impact on digital assets. The era of minting pixelated punks or bored apes on Ethereum and flipping them for enormous profits came to an end. Instead, real-world assets, prominent brands, and e-commerce took center stage. According to the industry watchdog NonFungible’s report, the third quarter of 2022 witnessed a 77% drop in transaction volume, resulting in net losses of $450 million compared to the previous year.
However, by the end of 2023, the NFT market had shown signs of resilience. It had matured significantly. Co-founder of NFT.NYC, Jodee Rich, candidly admitted during the event that the speculative frenzy had subsided.
It’s important to note that this speculative frenzy gained momentum last year when two popular NFT trading platforms, OpenSea and Blur, engaged in a “race to the bottom” by offering zero-fee marketplaces and removing royalties for creators. In response, Yuga Labs and Magic Edgen established the Creator’s Alliance, advocating for the protection of royalty rights and supporting only marketplaces and projects that upheld these principles.
During the recent NFT.NYC, the new digital divide was evident. The hype-driven individuals in hoodies were replaced by serious technologists, nerds, and discussions centered around file storage. Art Blocks’ Erc Calderon and generative artist Tyler Hobbes held a talk at the Museum of Moving Image, while IPFS, a leading NFT storage platform, organized an event called “The Moment: Art, NFTs, and Cultural Preservation” at the Museum of Modern Art’s sister venue, PS1. Representatives from FileCoin and Protocol Labs came together to share their insights.
At the official venue of NFT.NYC, the Javits Center, the focus seemed to be less on technology and art and more on sales, merchandising, and marketing. Pudgy Penguins, an NFT collection that even launched a line of dolls at Walmart, managed to raise $10 million by selling these digital-turned-physical cuddly artifacts.
What we are witnessing is not the death of NFTs but rather their rebranding. They are like phoenixes rising from the ashes, undergoing a transformative process. The current phase signifies a recalibration of the market rather than its demise. As investors and collectors navigate through the aftermath of the recent downturn, they are discerning the valuable assets from the lesser ones. The initial hype may have subsided, but the fundamental strength of NFTs remains intact.
Read more:
NFT Price Floor co-founder predicts the resurgence of quality NFTs despite the market retreat.
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