The market for non-fungible tokens almost did not notice the collapse of cryptocurrency quotes, which occurred in May, when the price of bitcoin for the first time since January fell to $ 30 thousand.According to the Nonfungible service, the volume of primary sales of NFT has been growing since mid-May, as well as the number of token buyers. For example, sports non-fungible tokens experienced a surge in primary and secondary sales in the second half of May, writes RBC Crypto.
The growth in popularity of NFT tokens was recorded back in March 2021. This happened after the sale of the painting by the artist Beeple in the form of NFT by the auction house Christie’s for $ 69.3 million. In March, sales of non-fungible tokens reached a record $ 200 million – more than in all of 2020.
High risk investments
The lack of correlation between the NFT market and cryptocurrency quotes indicates that these sectors are subject to different laws, explained Sergey Zhdanov, CEO of the EXMO crypto exchange. According to him, non-fungible tokens are not a cryptocurrency in the usual sense.
“An NFT token is only a digital shell, a blockchain that solves the issue of copyright first of all,” the expert noted.
If we talk about art, then the cost of an NFT token is determined based on how much is for a particular painting, music track, etc. the audience is ready to pay, added Sergey Zhdanov. He classifies NFT as a high-risk investment, even though it was resilient during the cryptocurrency market crash. The CEO of the EXMO crypto exchange advised to invest no more than 10% of the investment portfolio in such assets.
Unclear prospects
The NFT market should not be considered as a protective tool against fluctuations in cryptocurrency quotes, since non-fungible tokens are one of the young and high-risk sectors of the crypto market, explained Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service. In his opinion, it is not worth betting on NFT when forming an investment portfolio, since the prospect of the secondary market for many expensive tokens, especially those tied to art objects, remains unclear.
“This is an interesting area, it is worth understanding it, but I would not recommend entering such assets for all the money,” the expert noted.
Nikita Soshnikov considers NFT tokens of art objects to be the most promising, but not collections like CryptoPunks, but works of young artists who already have a reputation in the field of art, such as Banksy. Also, the director of the cryptocurrency exchange service Alfacash recommends paying attention to sports NFT tokens.
In March, one of the artist Banksy’s works was burned to be turned into an NFT token. The destruction of the painting took place at an unknown location in Brooklyn and was broadcast on YouTube and Twitter. After the painting was burned, the blockchain company created a non-fungible token tied to the “digital image of the art object.” This is the first known case of the transformation of a physically existing work of art into a virtual asset.
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