NFT Market Faces Challenges
Despite the recent slump in value, some major institutions are still placing big bets on Non-Fungible Tokens (NFTs). The NFT market experienced a euphoric bull run in 2021 and 2022, with a monthly trading volume of nearly $3 billion recorded in August 2021. However, the fortunes of the market have transformed significantly since then. Recent data shows that the weekly traded value in July 2023 was only around $80 million, representing just 3% of its peak value.
A study by crypto analysis firm dappGambl revealed that 95% of the examined NFT collections had a market cap of zero Ether (ETH), rendering their investments worthless for over 23 million people. Furthermore, 79% of all NFT collections remained unsold, leading to a surplus of supply in the market and reduced demand among collectors and investors.
The NFT Spring: A Bold Prediction
Despite the challenges faced by the NFT market, some experts see a glimmer of hope. Prominent crypto analyst Krypto Kaleo predicts that the market is approaching its bottom and drawing parallels with previous crypto trends. He believes that the current period is similar to a “test pump” experienced during the ICO craze of 2017. Kaleo suggests that after a period of consolidation and recalibration, the NFT market could see a resurgence in 2024 and 2025.
PayPal’s NFT Foray
Amidst waning interest in NFTs, institutional players known for their contrarian investing approach are venturing into the sector. PayPal recently filed four patent applications related to NFTs, Layer 2 (L2) solutions, and metaverse technology. This move by PayPal, along with other institutions such as SONY, Formula One, Fidelity Investments, and Fujitsu, signals a potential NFT revival ahead.
Hot Take: The Future of NFTs
Although the NFT market has faced challenges and experienced a significant slump in value, there are indications that it may bounce back in the future. While the current sentiment may be pessimistic, experts like Krypto Kaleo believe that the market is undergoing a necessary consolidation phase and could see a resurgence in the coming years. Additionally, institutional players like PayPal entering the NFT space further indicate potential growth and development. While the future remains uncertain, it’s worth keeping an eye on the NFT market for potential opportunities and developments.
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