Headlines predicting the death of Bitcoin are nothing new. Over the past decade, we’ve seen every imaginable permutation of why Bitcoin is “dead,” yet the current crypto winter has brought very few such dire pronouncements.
It looks a little different this time. It may be difficult to write such a eulogy with Bitcoin (BTC) hovering around $28,000 and a spot Bitcoin ETF on the horizon. Ethereum doesn’t seem to be dead either.
But the blockchain industry and commentators still need a corpse to prick, and that’s what they found with the rotten corpse that is the non-fungible token (NFT) market.
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NFTs are dead. deceased. Lifeless. NFTs are the “Norwegian Blue” from Monty Python’s Dead Parrot drawing. And the grave dancing began. To quote a recent Rolling Stone headline, “Your NFTs Are Actually—Finally—Worthless at All.”
Rolling Stone is right — most NFTs have no value at all.
However, this should come as no surprise to anyone who has been in the cryptocurrency space for a few cycles. Most ICO tokens from the 2017 bull market were dead by the winter of 2018/19. Likewise, countless DeFi protocol tokens after the summer of 2020.
Today, more than 1.8 million tokens have a total market cap of just over $1 trillion. But the top 10 protocols and codes account for more than 93% of the total.
Calculate. That’s a very long tail of worthless zombie coins. The vast majority of all codes die. So why should NFTs be any different?
The barrier to entry for creating an NFT project in hopes of striking it rich was (and still is) low. Anyone can, and apparently has, created an NFT collection in a few minutes with just a few keystrokes.
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So, what happened when a wave of business activity and money flowed into this new corner of the cryptocurrency market in mid-2021? The free market responded exactly as it was supposed to do: it provided supply. And supply ≠ quality, especially in this industry.
We’ve seen the same cycle over and over again, and this is a first Real NFT winter.
A-listers have quietly removed their NFT Twitter avatars. Jimmy Fallon isn’t kidding monkeys with Paris Hilton on late night TV. Ashton Kutcher’s Stoner Cats has reached a settlement with the Securities and Exchange Commission (SEC). There is a collective feeling of embarrassment.
NFT trading volumes have collapsed, from about $1 billion weekly in mid-2021 to early 2022, to less than $100 million today.
It’s bleak. But, as I said back in October 2021 about NFTs, “Peaks and troughs are nothing new, what comes out of them is what’s worth paying attention to.”
For those curious and open-minded enough to look beneath the surface of today’s generalization that “NFTs are dead,” there are signs of life amid the ruins.
In September, news emerged that PayPal had filed a patent application in March related to an NFT purchasing and transfer system.
Pudgy Penguins continues to expand into physical toys, first selling on Amazon in March and recently expanding to 2,000 Walmart stores across the US (disclaimer: I own a chubby penguin in jpeg format).
Doodles has teamed up with casual footwear brand Crocs in a similar effort to merge the physical and the digital, with Gary Vee’s Veefriends and Reebok also collaborating.
At a concert over the summer, Harry Styles fans could download an app featuring a self-custodial digital wallet for future NFT rewards. Meanwhile, Justin Bieber is teaming up with a blockchain music platform to turn a song into an NFT with royalty streams to NFT holders.
Major auction houses continue to bring major artists into the NFT world, for example, Keith Haring with Christie’s, and Sotheby’s partnership with Ledger to offer a co-branded Ledger Nano
If you keep looking, you will find more and more signs of life, because NFTs are not “dead”.
The fundamental technological primitiveness of what NFTs are and what they offer will not “die,” just as blockchain will not “die.” They will simply continue to evolve as weak hands, weak teams, scams, copycats and fast money fade into history, another footnote from another crypto cycle.
As we move from this NFT winter into a new season, we expect to see more developed and commercially viable NFT projects, enriching the ecosystem in new and meaningful ways.
This article is for general information purposes and is not intended and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.