Nonfungible tokens, or NFTs, have taken the cryptocurrency sector by storm in 2021. The rising curiosity in these digital collectibles resulted in record-breaking buying and selling volumes throughout the month of August, with particular person NFT gross sales exceeding more than $1 million dollars regularly. 

But with so many NFTs at present available on the market, it may be troublesome to find out which one-of-a-kind collectibles are well worth the excessive costs. It’s additionally necessary to level out that though NFTs are going mainstream, they’re straight tied to the cryptocurrency ecosystem and, subsequently, are susceptible to market volatility.

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As an example, data exhibits that the overall quantity of NFTs traded on main marketplaces declined firstly of September, across the similar time Bitcoin (BTCdropped below the $43,000 mark.

Uncovering the worth behind extremely sought-after NFTs

Though NFT buying and selling quantity has continued to deflate this month, extremely sought-after initiatives resembling CryptoPunks and EtherRocks are nonetheless seeing high-priced gross sales. Whereas these have been each a number of the first items of artwork to be featured on the Ethereum blockchain, Andrew, founding chief advertising officer of stablecoin undertaking Reserve.org, informed Cointelegraph that he believes EtherRocks, specifically, will proceed to rise in worth attributable to the truth that solely 100 have been created. “Punks, Rocks and Kittens are all basic 2017 ‘artwork’ of Ethereum crypto. Nevertheless, there are millions of kittens and punks and solely 100 rocks.”

Echoing Andrew, Snowfro, founding father of the NFT artwork platform Artwork Blocks, informed Cointelegraph that, typically, CryptoPunks function independently from the general market. “There are solely 10,000 of them, and in the long run, it’s clear that greater than 10,000 folks need to personal one, so there’ll doubtless at all times be robust curiosity in Punks,” they stated.

As a result of restricted quantity of CryptoPunks and EtherRocks available on the market, the homeowners of those NFTs can also be extra hesitant to promote. In line with Andrew, EtherRock homeowners will most definitely by no means promote just because they need to be part of crypto historical past: “One of many causes Van Gogh items are so extremely valued is due to their historic significance. The identical may probably be stated of the historic significance of an EtherRock.” In flip, Andrew defined that EtherRock NFT holders immediately turn into a part of an unique membership, which additionally triggers astronomical costs for EtherRocks: “The final word logic for me is that within the subsequent three to 30 years, NFTs created in 2017 will probably be extraordinarily treasured. Virtually like historic artwork.”

Talking from expertise, Fungibles, CEO of Greenleaf Ventures, informed Cointelegraph that he bought his EtherRock after receiving a private message from social media guru Gary Vaynerchuk concerning the undertaking:

“On the time, there have been solely three rocks left promoting for 8.5 ETH every. I had a great feeling concerning the undertaking as a result of it was from 2017, and there have been solely 100 rocks ever created. I pulled the set off after which despatched out a tweet about why I bought a $24,000 rock.”

Along with the rarity and historical past behind the undertaking, Fungibles talked about that EtherRocks additionally make for the right meme: “If this undertaking takes off, it exhibits that there’s something stunning about one thing so horrible wanting that might finally go to zero. This makes for the right meme and collectible.” 

Fungibles additionally identified that a number of the most sought-after NFTs in the present day additionally present homeowners with entry. Particularly talking, he defined that proudly owning an EtherRock offers people with entry to unique gatherings world wide whereas additionally permitting this group to vote on particular issues that may assist transfer the worth of EtherRocks up over time: “Communities are coming collectively round this token, which suggests getting access to sure issues. For me, this can be a long-term funding.”

Anthony Scaramucci, founding father of SkyBridge Capital and SALT, additional informed Cointelegraph that SkyBridge simply announced the launch of Flatter, an NFT platform that mixes unique experiences with sought-after collectibles. In line with Scaramucci, Flatter goals to show conventional collectors to a broader market the place they’ll expertise digital artwork and experiences in a novel and thrilling manner: “Flatter NFT homeowners may have entry to a group that features shared experiences, occasions, early and unique entry to happenings.”

Though the platform was simply launched, Flatter may probably showcase the totally different prospects provided by NFTs to conventional traders, particularly as established artwork collectors start to enter the NFT sector. Talking on the NFT panel throughout SkyBridge’s annual SALT convention, Noah Davis, specialist and head of digital artwork and on-line gross sales at Christie’s, talked about that many established artwork collectors partook in Christie’s Andy Warhol NFT auction in Might this 12 months. Davis famous that three out of 5 of those collectibles went to blue-chip artwork patrons, mentioning that there’s a shift towards NFTs occurring in the true world.

An excessive amount of provide, however not sufficient demand?

Whereas extremely sought-after NFTs might have sure traits, an inflow of recent NFTs continues to flood the cryptocurrency market day by day. However even when these NFTs boast rarity, distinctive options and accessibility, the query as as to whether or not an excessive amount of provide will exceed demand stays. Furthermore, if that is so, NFTs are sure to lose worth over time.

Jason Lau, chief working officer of cryptocurrency change Okcoin, informed Cointelegraph that NFTs can in the end be created by anybody with web entry however {that a} a lot smaller inhabitants is inquisitive about proudly owning them:

“Finally, provide will outweigh demand. That is very very similar to some other creator-based financial system. For NFTs, we’re nonetheless in an early stage, and lots of exploration is being accomplished by each creators and homeowners — how we finally attain equilibrium stays to be seen.”

Snowfro has a unique opinion on the matter, although, noting that “an excessive amount of provide” is a counterintuitive idea when you might have a whole bunch of artists eager to showcase their work in a manner that has by no means existed earlier than.

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By way of worth misplaced over time, Lau identified that there are lots of parallels between NFTs and conventional artwork. On account of provide probably outweighing demand, he believes that some NFTs will inevitably lose worth, whereas others will accrue in worth as new creators and experiences rise in reputation.

Santiago Roel Santos, a decentralized finance investor, additional informed Cointelegraph that though not all NFTs will maintain their worth, he does anticipate to see the subsequent Picasso emerge from this motion: “At this level, each main artist, creator and studio is considering NFTs and have a technique.” However even when worth is misplaced, Fungibles stays optimistic:

“There will probably be a bear market, and sure NFTs will probably be lower than they’re in the present day, however this can even allow new patrons to come back in and for EtherRocks to alter fingers. I feel there’ll at all times be a market whatever the worth.”