NFT Market Struggles but Wealthy Collectors Keep Interest Alive
The market for non-fungible tokens (NFTs), which once experienced explosive growth, now faces significant challenges, with token valuations plummeting far below the peaks seen in 2021 and 2022. This downturn has been underscored by the recent cancellation of NFT Paris, a premier event for the NFT community, which was called off just a month prior to its scheduled date.
Despite the apparent decline, some figures in the industry argue that the NFT market is far from extinguished. Yat Siu, co-founder of Animoca Brands—a leading Web3 development and venture capital firm—insists that wealthy collectors continue to invigorate the market. In an interview at the CfC St. Moritz crypto conference, Siu noted that individuals with significant financial means are still engaging with NFTs, much like traditional art collectors who have an affinity for renowned artists such as Picasso.
Siu explained that possessing NFTs creates a community among collectors, akin to that of high-end automobiles or luxury watches. He shared his personal involvement in the NFT space, acknowledging that while his own portfolio has seen declines of around 80%, the assets were not intended for quick resale but rather as long-term investments.
NFTs, which first emerged on the Ethereum blockchain in late 2017 with the launch of collectibles like Cryptokitties, have seen various cycles of hype and investment. After peaking in 2021 with monthly sales exceeding $1 billion, current monthly sales have reportedly stabilized around $300 million, primarily fueled by affluent digital art enthusiasts. Siu highlighted prominent collectors like billionaire Adam Weitsman, who has made notable purchases in the NFT market, including Otherdeed lands and Bored Apes.
Reflecting on the relative nature of the NFT market, Siu mentioned, “Remember that five years ago this was a zero dollar market.” He pointed to the clear data available on the blockchain, which allows for comprehensive analysis of market trends and performance.
Addressing the cancellation of NFT Paris, Siu contended that it should not be viewed as a negative reflection on NFTs or the event itself but rather indicative of shifting attitudes in France towards the crypto sector. Once considered supportive of cryptocurrencies, France’s stance seems to have shifted dramatically, with stringent scrutiny on projects such as Sorare, a fantasy soccer game facing regulatory challenges.
Security concerns also played a critical role in the decision to cancel the event. Over the past year, France has witnessed alarming incidents of kidnapping and abduction targeting crypto executives and investors, leading to increased caution among industry participants. Siu noted that many, including himself, have been hesitant to engage in the Paris market due to these safety issues, illustrating a complex backdrop for the future of NFTs in Europe.
Source: https://news.ssbcrack.com/nft-market-struggles-but-wealthy-collectors-keep-interest-alive/
