With any growing trends, especially those new, there is a question as to whether the trend could come to an abrupt end.
Are NFTs in a bubble?
History shows many bubbles of the past eventually pop. It can take several weeks, months or years or even decades – but eventually many huge trends phase out.
The concern in the industry, and from those outside, is that NFTs are in a collapsing bubble that is due to burst leaving thousands of investors millions of dollars out of profit.
We’ll look at supporting evidence on the NFT trends against similar past trends and look at whether the NFT bubble is really bursting or about to soar to new heights.
Is the NFT Bubble About to Burst?
With millions of dollars being pumped in to the NFT industry, supply now outweighing demand and the number of NFT projects now past the mint stage and on the path to build their long-term future roadmap with very little to show for it so far – anyone would be excused by thinking the NFT bubble is on the verge of bursting.
But it is worth looking a little deeper at the evidence and of past trends.
How the NFT Bubble Compares to Other Bubbles
When cryptocurrency started was back in the early 2000s and Bitcoin could be purchased for a few cents (if only a time machine were available), and it started climbing to heights of $100 a coin, $200 a coin, many people thought at the time that cryptocurrency was a bubble about to pop.
The internet launched in the 90s. Businesses weren’t convinced, and the cost to build and host a website were huge sums of money. Basic sites started springing up, but many thought that a fad, a bubble and on the verge of collapse – especially when the dot com boom arrived and saw millions of invested dollars lost.
Bitcoin is now worth over $44,000 a coin and where would be without the internet nowadays.
History has very good evidence that presumed bubbles do not necessarily always go pop.
Now the objects that get built on such concepts may pop, but not the concept itself.
Look at Boo.com. One of the most famous dot com crashes of all time. Founded in London in 1999 it was set to revolutionize shopping on the internet.
Their ambitions lavish, and they went all in on this $135m project.
The problem with Boo.com is the internet just wasn’t ready. Confidence wasn’t high enough, and the cost to enter the market very high meaning Boo.com were almost burning money to keep itself afloat.
It was as admirable attempt, but the clothing industry just wasn’t ready to move online as fast as they needed to keep Boo afloat.
Now Boo was a $135m crash but did it bring down the entire internet? – no of course not.
The internet carried on without phase allowing small business to launch a presence, people to blog about their lives and cat photos and videos to be uploaded in their bounds.
We may, and probably will, see the demise of many cartoon graphic NFTs with little reason to invest aside from the initial enthusiastic spark created at launch.
These offer little reason for long-term investment away from the Discord cries of ‘we’re going to the moon’.
The NFTs that will see the highest longevity will be those that offer their holders a reason to HODL (Hold On for Dear Life) to their NFTs.
They will include projects that a building a future worth.
For example, imagine investing in a player in an online game now, and in 9 months from now that game is built, and people start playing. The game goes mainstream, thousands or millions are desperate to get involved but only NFT holders can play.
Or perhaps the NFT project is to invest in space in the Metaverse. The future of the internet allowing immersive interaction and involvement.
Meta – the new name for the Facebook company – has invested billions in the Metaverse, in fact it’s why Zuckerberg has recently changed the name of the company to Meta, providing a clear indication to its investors of where they are headed.
The NFT industry and Metaverse are closely linked with Metaverse projects starting with the investments made through NFT launches.
It is a very close industry to watch, and this is just one of the reasons the NFT space could soar rather than pop.
Why the NFT Bubble Could Soar
Although the future of the NFT space looks uncertain, what is widely accepted is that the NFT industry whatever it shapes itself to be, is here to stay for the long term.
It may and probably will move away from cartoon apes, but the authentication it provides is something not only is reassuring for individuals but sought after by investors and businesses.
In Jan 2022 the first home sold as an NFT through the blockchain.
The security, authentication and audit trail of a digital asset has been long sought after in the digital realm.
Art has always been collectible. Usually this has taken a physical form, but you only have to look at the sale of pieces such as the Lo Sono.
The translation of which means ‘I am’ is literally nothing.
Yes nothing. Someone created nothing as an art form, and someone bought nothing – for reasons yet unknown.
Lo Sono is being labelled ‘immaterial art’ where the concept behind the piece has the value.
Somebody bought an ‘invisible’ piece of art, that must under instruction be houses in a 5 foot by 5-foot wooden frame – but comes complete with letter of authenticity – for the sum of $18,300.
Hope nobody steals it!
If someone can go out in to an official and revered auction house in Italy and auction off nothing in the name of art, and find a buyer for $18,300, who says the NFT space can’t continue to find its own space.
In Lo Sono’s case it was ‘created’ by an established and famous artist.
NFTs will attract a similar attention, but not just from artists but a wide spectrum of talent, creative industries, crowdfund seeking entrepreneurs, musicians, real estate (real and virtually) and probably may more we haven’t even considered.
There will be many winners in this journey, and far more losers, but the NFT space is one where the bubble is stable and made of strong material, and likely to soar high into the sky!
When Could the NFT Bubble Burst
There is a small window of possibility that the NFT bubble could burst between the demise of the cartoon inspired NFTs and the rise of the future of the NFT space.
The NFT market is being heavily propped up right now by the gold rush comparable to the 1800s.
Money is flooding the NFT space in huge sums and the media, and social media, are quick to highlight the rare cases of someone making a million dollars overnight.
Stories such as this will bring many novices in their droves ready to waste another dollar on the next big thing.
Hundreds of thousands of new NFTs are launching every day in seek of enough demand to make the founders millionaires overnight.
There is too much supply for the demand. These will fizzle out over the next few months as NFT releasers realize buyers are only buying those projects with a real potential future – not an artificially hyped up one.
As we’ve seen, the future of the NFT space is looking very bright and profitable but it is new, and it needs time for this future to be realized.
This NFT window could see the demise and negativity of the industry surpass and damage any new potential.
Is it possible yes, is it likely – probably not!
If this was going to happen it would be during 2022 or up to mid-2023. If the NFT industry surpasses this and other projects in the pipeline past the cartoon ape craze become into fruition, then the NFT industry could have just found its place in digital history.
In Conclusion – The NFT Bubble
The likely conclusion to any such NFT bubble given trend analysis and current data is that the NFT space has multiple uses to help and support many industries, and to make them more efficient and accountable especially in the digital age.
Digital art is likely to surpass physical art in popularity.
People will house digital assets in years to come like people currently house physical assets.
The physical asset industry is not going anywhere now or in the future, but the digital asset industry will coexist one happy NFT lead space – with no bubbles in sight!
