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 in the course of 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 instantly tied to the cryptocurrency ecosystem and, due to this fact, are liable to market volatility.

As an illustration, data reveals that the overall quantity of NFTs traded on main marketplaces declined at first 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 akin to CryptoPunks and EtherRocks are nonetheless seeing high-priced gross sales. Whereas these had been each a number of the first items of artwork to be featured on the Ethereum blockchain, Andrew, founding chief advertising and marketing officer of stablecoin challenge Reserve.org, instructed Cointelegraph that he believes EtherRocks, specifically, will proceed to rise in worth on account of the truth that solely 100 had 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, instructed Cointelegraph that, generally, CryptoPunks function independently from the general market. “There are solely 10,000 of them, and ultimately, it’s clear that greater than 10,000 individuals need to personal one, so there’ll doubtless all the time be robust curiosity in Punks,” they mentioned.

As a result of restricted quantity of CryptoPunks and EtherRocks available on the market, the house owners of those NFTs may additionally be extra hesitant to promote. Based on Andrew, EtherRock house owners will most certainly 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 might presumably be mentioned of the historic significance of an EtherRock.” In flip, Andrew defined that EtherRock NFT holders immediately develop 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 likely be extraordinarily treasured. Virtually like historic artwork.”

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

“On the time, there have been solely three rocks left promoting for eight.5 ETH every. I had an excellent feeling concerning the challenge 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 challenge, Fungibles talked about that EtherRocks additionally make for the proper meme: “If this challenge takes off, it reveals that there’s something stunning about one thing so horrible wanting that would finally go to zero. This makes for the proper meme and collectible.” 

Fungibles additionally identified that a number of the most sought-after NFTs in the present day additionally present house owners with entry. Particularly talking, he defined that proudly owning an EtherRock supplies people with entry to unique gatherings around the globe 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 implies getting access to sure issues. For me, this can be a long-term funding.”

Anthony Scaramucci, founding father of SkyBridge Capital and SALT, additional instructed Cointelegraph that SkyBridge simply announced the launch of Flatter, an NFT platform that mixes unique experiences with sought-after collectibles. Based on Scaramucci, Flatter goals to reveal conventional collectors to a broader market the place they will expertise digital artwork and experiences in a singular and thrilling method: “Flatter NFT house owners could have entry to a group that features shared experiences, occasions, early and unique entry to happenings.”

Though the platform was simply launched, Flatter might doubtlessly showcase the completely different prospects supplied by NFTs to conventional buyers, 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 Could this 12 months. Davis famous that three out of 5 of those collectibles went to blue-chip artwork consumers, declaring that there’s a shift towards NFTs occurring in the actual world.

An excessive amount of provide, however not sufficient demand?

Whereas extremely sought-after NFTs could 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 if or not an excessive amount of provide will exceed demand stays. Furthermore, if so, NFTs are sure to lose worth over time.

Jason Lau, chief working officer of cryptocurrency alternate Okcoin, instructed Cointelegraph that NFTs can in the end be created by anybody with web entry however that a a lot smaller inhabitants is all for proudly owning them:

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

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

Associated: Novi-FT? Facebook’s NFT support may not drive crypto adoption

By way of worth misplaced over time, Lau identified that there are plenty of parallels between NFTs and conventional artwork. Because of provide doubtlessly 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 instructed Cointelegraph that though not all NFTs will maintain their worth, he does count on to see the following 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 likely be a bear market, and sure NFTs will likely be lower than they’re in the present day, however this may even allow new consumers to return in and for EtherRocks to alter palms. I feel there’ll all the time be a market whatever the value.”