Current State of the NFT Boom Cycle

The first three months of the year witnessed rocketing demand for NFTs, the market cap of NFT projects rose by 1,785%. Such has been the success of the sector it has begun to draw the interest and participation of celebrities such as Snoop Dogg, Tony Hawk, Lindsay Lohan, Grimes, Lewis Capaldi, and even Edward Snowden fomo-ing in on the NFT craze.

By
Robert D. Knight
on
May 2, 2021
Category:
Blockchain News

Slow Down

Examining the NFT art market there are some early indicators that the NFT boom is petering out. Metrics from DappRader show that trading on OpenSea is down 33% in the past month. Meanwhile, volume on CryptoPunks fell by 7%, and NBA Top Shot is down by an incredible 61%.

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Further, the average price of an NFT fell by 60% in April when compared to February highs. Market research from NonFungible.com shows that the average price for a non-fungible token was around $1,500 in April while the average price in February was peaking above $4,000. While the market may be undergoing a cooling period, that need not be a bad thing. In January, the average cost of an NFT was a mere $195, while the previous year it was a paltry $30.

Melissa Gilmour, founder of NFT agency Lily & Piper believes that a price drop was to be expected. In a recent interview with CNN she said:

A drop in value was inevitable. There has been an over-saturation of platforms and it's getting hard to differentiate and navigate. There are elements of a hype cycle in this one, but we still see it as an immense long-term opportunity.

NFT Uses

Beyond the speculative market, a number of projects are delving into varied use cases for non-fungible tokens. Some, such as the sculpture Block 21 - the first NFT to be sold at Christie’s - are linking physical goods to the digital tokens.

Other projects such as AnRKey X and ChainGuardians are employing NFTs in gaming environments. The concept of linking gaming and NFTs hasn’t gone unnoticed by one of the world’s largest toy companies. Toy giant Hasbro is actively looking to develop NFT technology for their range of collectible games including Magic: The Gathering.

Hasbro CEO Brian Goldner believes that non-fungible tokens could be an asset for several brands in their portfolio. 

NFTs are a real opportunity for us,” Goldner told Polygon. “As you know, we have so many brands that really operate on multiple demographic levels; whether it’s Transformers, whether it’s Magic and the D&D brand, and brands like G.I. Joe. We have a team that is leading our effort out of the west coast. We have our arms around this and see multiple opportunities on the NFT side, and you’ll hear more about that as we move forward. But we are actively developing our opportunities here, and we do see it as substantial.

NFTs on BSC

While the bulk of the NFT market has been on Ethereum until recently, the sector is now beginning to diversify with a number of quality projects developing on or emigrating to Binance Smart Chain. 

BSC exchanges BakerySwap and PancakeSwap both have their own dedicated NFT marketplaces. As we previously reported there are also some truly unique concepts being developed on BSC with APYSwap pioneering shared ownership of NFTs on its platform.

The NFT art market is showing signs of slowing down, but there is plenty of activity elsewhere to suggest that NFTs have a bright future ahead of them.

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Robert D. Knight

Robert D. Knight is an experienced journalist and copywriter who has been working in crypto for 4+ years. His bags are heavy and he also hodls some cryptocurrency.