By
Temitope Olatunji
May 13th, 2024
After taking the world by storm, prices of NFTs are now declining. Proponents express confidence that the NFT space still has potentials to grow and that this was not the end of the road for the digital assets.
Sotheby’s has announced that British inventor Tim Berners-Lee is auctioning the original code for the World Wide Web as an NFT. The auction – titled “This Changed Everything” – will run in London from June 23-30, with bidding starting at $1,000 and the proceeds will fund initiatives that Berners-Lee and his wife support.
Again, the market is diversifying its use of the technology. From selling off apartments as NFT to creating experiences, NFT experiments are finding mainstream acceptance with more companies and projects looking to even explore the space.
Web Code as the Latest Addition to the NFT Buzz
Many NFTs got auctioned off at prices that could only have been imagined.
March saw Mike Winkelman, a Southern Carolina-based designer sell an NFT for $69 million. Then came the CEO of Twitter Jack Dorsey, who made his first tweet into a digital collectable and sold it for $2.9 million in the same month. Just last week, CryptoPunk was auctioned by Sotheby’s for more than $11.7 million.
According to data from Nonfungible, a website that tracks the market for these digital assets, Gross NFT sales in the first quarter alone amounted to about $2 billion. Co-founder and CEO of S!NG Geoff Osler believes the buzz around digital collectables was generated by the “pent-up demand” from wealth accumulated from rising cryptocurrency prices.
The high-profile auctions suggest that people are treating NFTs as speculative assets and as with all speculative securities, prices can become unstable as the supply of the items become limited.
Current Realities
New data suggests that mean volumes have dropped with gross sales dropping from a ceiling of $176 million on May 9 to $48.7 million on June 15. This brings the assets back to where they were at the turn of the year.
Prices of popular NFTs also appear to be dwindling. SuperRare fell from $31,778 in early May to around $5,342 in early June. The same happened with CryptoPunks with the weekly average dropping by around 49% from $99,720 to $50, 840 in the same time frame.
Legal concerns have also been raised with copyright infringement being the chief. Many artists and content creators have made claims about their creations being stolen and auctioned off as NFTs without their slightest permission.
To this, S!NG’s CEO, Osler says that legal protections should be added “directly into the NFTs themselves,” and that consumers should be allowed to “have legal recourse if something goes wrong.”
Proponents of the assets believe that the shortfall is only in the short term and that the prices will rise again as more collectables are auctioned off.
Nadya Ivanova, chief operating officer of L’Atelier believes the real matter is in the significant long-term value of the NFTs. “As augmented and virtual reality technology matures, normal people are going to spend more and more of their time – and therefore money – in virtual environments,” she added.