Will the NFT market experience a renaissance?

Will the NFT market experience a renaissance this cycle? This can happen under one condition.

CryptoPunk NFT sold… at a loss?

In recent weeks, an NFT from the CryptoPunks collection number #5822 was sold. This is evident from onchain data. The token was transferred to an anonymous wallet on the Ethereum network. It is not known who the buyer was.

It is worth recalling that CryptoPunk #5822 was purchased for the equivalent of almost USD 24 million. This happened in February 2022. During this period it was 8,000 ETH.

Where does this price come from? This is one of nine extremely rare tokens from the “punk” collection. the value comes from the attributes of the character in the image the NFT is associated with (specifically the color of his skin and bandana).

In February 2022, NFTs in this series were extremely expensive overall. Their “threshold” value was 60 ETH, or approximately USD 159,000. Currently it is 23 ETH – only USD 61,000.

We don’t know who bought #5822 and for how much. However, considering that the popularity of these tokens has decreased, we can assume that the sale was made at a loss. And quite a lot.

NFTs make sense

As you can see, NFTs purchased in 2021 and 2022 did not turn out to be a bull’s-eye investment. However, I do not rule out the idea of ​​NFTs. These tokens may make sense and be needed in the market. However, the narrative around these projects must change.

Let me start by saying that NFTs have been a bit mis-promoted from the very beginning. The idea was sold to investors as an investment in pictures. They might be rare and good at times, but they were still just graphics. The ideas could have been developed in a completely different way.

For example, Bored Ape Yach Club is, in fact, quite an exclusive VIP club. Or more precisely: it was supposed to be something like that. So it wasn’t about buying graphics with cartoon monkeys, but about belonging to a club where you can meet other important, influential people. This is similar to the idea of ​​the Business Center Club. This is how NFTs should have been promoted from the beginning.

Additionally, these tokens could be an alternative to traditional notarial deeds. Selling an NFT linked to a real object (a work of art, a rare album or book, real estate, a car) would not only be convenient, but would also not require a visit to a notary (in Poland, this would, of course, require changes in the law).

So NFTs make sense. But they were presented to us all wrong from the very beginning. Few people understood their real potential (apart from speculation). So it’s possible that someone will reinvent non-fungible tokens this cycle. Possibly under a different name to distance itself from the inglorious past, but with the right idea.