Is there a future for NFT art, or will it be just crash and burn?
“There is this idea of making everything an NFT, and just because it’s become an NFT, it’s now valuable,” Bell said. “For me, this is when it gets very dangerous and is akin to a financial bubble.”
I kind of agree with the points raised by that investor, especially given how much skin in the game he has in that space. Not everything can be considered art, and some even mentioned that 99% of current NFT projects will fail. And the chance of reselling the NFT in the secondary market is even slimmer given the imbalance of supply and demand nowadays.
Of course, beauty is in the eye of the beholder, but in the case of NFT, there are simply not enough eyes to behold that beauty yet. You can argue that the market is exploding, but I feel it’s just because it has just started, so the growth spurt is going on. Compared to traditional financial markets, and even crypto matket, NFT market is still just a very small fraction.
Another problem is that the market is too disjointed at the moment. The biggest NFT marketplace is Opensea, but the insane minting cost there is a huge barrier to entry for small investors and artists. And if you go with a smaller marketplace with lower or free minting fee, the liquidity is not there, so the marketplace is almost non-existent.
The only segment of the NFT market that is still buzzing is the game NFT. But that is driven by the games themselves, not by the appeal of the NFT items, so it ties closely to the success of the games, and will hold little value once the respective games run out of favor.
In order for NFT to get widespread adoption and have long lasting values, I believe there needs to be more connections between NFT marketplaces, and more potential buyers, especially in the secondary markets. Not many people will commit to buy something and hold forever. That’s why the ability to resell is very important.
Also, there needs to be more use cases for the NFT that people purchase. Here it becomes interesting, and links to the concept of the metaverse. If NFT art that people purchase can be displayed and sold easily in a virtual gallery or art fair or a common art marketplace in the metaverse, instead of individual marketplace where they were minted, the access level will increase and there will be more chances for transactions to happen.
Art is by nature unique, subjective and illiquid. But if there is a way to increase outreach and make it more accessible to the mass, the future of it may be somewhat brighter.
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