The NFT market for digital artwork – such as Bored Apes, Crypto Kitties and NBA Top Shots – has collapsed. It seems these were fads, similar to Beanie Babies. It remains to be seen whether prices for these NFTs will recover.
The price collapse of that market coincided with the crash of bitcoin, Ethereum and other digital assets. However, in the past year, prices for these coins has risen sharply – bitcoin is up 100% so far this year – while prices for most NFTs remains at or near lows. The common viewpoint is that attention is focused on the commercial uses for BTC, ETH and other coins – uses that hyped NFT art lack. There is also an increasing engagement in crypto by institutional investors and governments, and they are focused on primarily on BTC, ETH and stablecoins. This trend is expected to continue.
Meanwhile, there is a new level of interest in NFTs, but of a more commercial nature than the creation and sale of digital art. This is now referred to as the RWA – the tokenization of Real World Assets. Starbucks now distributes rewards to its Loyalty Program members via NFTs; Breitling gives all its watches an NFT so owners can track the provenance of its timepieces; The Norwegian Seafood Assn and Italy’s Parmigiano Reggiano are encoding their products with NFTs to combat forgeries, WalMart is encouraging lettuce growers to track their crops with blockchain technology to reduce the risks of exposure to salmonella, and the state of West Virginia is recording and distributing automobile titles as NFTs, a practice being adopted by other states. These are just a few examples of the uses of NFTs – demonstrating that this technology is alive and well and rapidly growing.
One of the biggest growth areas for NFTs in securities. Franklin Templeton has released the first-ever tokenized money market fund, and release of ETF shares as NFTs is under development by them and others. It’s projected that NFTs will begin to replace mutual fund and ETF shares this decade – a massive achievement for a $30 trillion industry, with huge implications for the financial services industry.
Given all this, will none of the Bored Ape NFTs ever again enjoy investor interest? Hard to believe, but we’ll see.