Non-Fungible Tokens Facing a Reckoning

The Non-Fungible Tokens (NFT) market seems to be undergoing a correction after sales dropped by a whopping 92% this week.

• Non-Fungible Token or NFT is a record on a cryptocurrency blockchain that links to anything digital—photo, digital artwork, GIF, video or even a tweet. It determines ownership of a digital item.
• In March 2021, the NFT of an artwork by digital artist Beeple was auctioned by Christie’s for $69 million. Since then, the NFT market has been scaling new heights with $17 billion in sales in 2021.
• In April 2022 though, NFT sales dropped by 92% in volume since the peak in September 2021. This has reignited the questions around whether what we saw with NFTs last year, was a big bubble.
• An indication of this was seen earlier this year when the NFT owner of the first tweet of Jack Dorsey (bought around $3 million) could only manage to get bids of $7,000 when he was reselling it .
• According to some experts, this was bound to happen as the sky-high valuations of NFTs weren’t backed by anything other than hype.
• Still others feel that’s not the case. Given the success of projects such as the Bored Ape Yacht Club and how mainstream brands are co-opting them, it’s too early to write NFTs off.