NFTs (non-fungible tokens) have been in the market for a while and despite the fact that trading volume has collapsed by 97% from the January peak, NFTs continue to prove themselves as assets that can provide users with a wide range of utilities.
More precisely, even though trading volume seems to have dropped dramatically on the most dominant NFT marketplace in the past four and half years, OpenSea amassed a trading volume of more than 17 billion dollars sales in 2021 and is in fact currently about 13.5 billion dollars in 2022 (according to the data from Dune analytics).
*https://dune.com/rchen8/opensea + https://dune.com/0xp1zza_boy/nft-research
Indeed, a lot of people in the NFT space have started to doubt in the liability and the future of NFT’s, even finance medias like Bloomberg for example started writing articles showing the downfall in volume in the recent months of the NFT market compared to the start of the year, adding even more fear in the space through people’s mind.
Yet, since Bloomberg wrote this article on the 28th of September, Apple has green-flagged new apps selling NFTs as well as developers of the existing apps listed on the App Store and there’s been a 1000 ETH and a 3300 ETH sale on NFT grails (a Cryptopunk and a Bored Ape Yacht Club).
As shown above, the recent sales of NFTs have been bullish in contrary of popular beliefs that they are not useful to society. As a matter of fact, their popularity is actually still increasing due to their convenience, their security, their utilities and sometimes just due to their appearance.
A good example that shows that NFTs can be more than “a picture of an ape” is the Proof Collective NFT. The Proof collective is an exclusive members-only NFT community responsible for hugely successful projects like Moonbirds, Oddities, Grails and Emotes (all holders of the pass had an access to these successful airdrops). The collective partnered with some of the most renowned artists in the space and has some of the biggest NFT collectors in its community.
The collective launched in December 2021 after Co-Founder Kevin Rose, an experienced investor and builder with a proven track record of being early to internet trends that currently also works as a partner at True Ventures (a venture capital firm that invests in early stage startups), turned a small group of his following into a close-knit community with a specific mission. The mission? To be the best eyes and ears on the ground in the NFT space, always on the lookout for the next successful project of greatest interest to members.
The Alpha group’s all-time sales volume has reached an astonishing 166’681 ETH ($284’751’153.16 as of writing). Indeed, the collective is constantly bringing value to its holders as this study from @punk9059 in May on twitter shows:
The group also raised $50M in a funding round led by venture capital firm Andreessen Horowitz, the funds secured in the Series A funding were said to be used to expand the proof ecosystem. Actually, it’s been recently confirmed that the Proof Collective team is developing a utility token for the Proof community. Although the token’s details remain shrouded in mystery, Kevin claimed that more information will be revealed in 2023.
Proof is just one of many examples that demonstrate that the advantages of the underlying technology are undisputed. From tokenized artworks to digital identities and NFT music tracks, the use cases for non-fungible tokens are diverse. Recently, people may have started to understand it as the ecosystem has shown sustainable signs of a comeback over the past two weeks.
Since September 12th, the performance of blue chip NFT collections has grown steadily, approaching the 10,000 ethers (ETH) lost in mid-August 2022, according to data from NFTGo.
On September 20th, the market cap, which is derived from the floor price and trading price of NFTs, climbed nearly 16.5 percent to about 11.25 million ETH.
Finally, the US Securities and Exchange Commission (SEC) has issued a statement saying that they are not going to classify all tokens as securities. This is good news for the industry because it means that many ICOs (Initial Coin Offerings) will not have to register with the SEC.
The SEC's statement is also beneficial for developers because it means that they will not have to worry about getting their tokens classified or banned by the government. In fact, this could be a catalyst for some of them to get back into development mode.
In conclusion, the market is going through hard times, but this bear market is something necessary that needed to happen and that is beneficial for the space. Indeed, during the bull market, speculation took over as dozens of new projects were created daily, diluting the rest of the market, while scammers raked in millions. Fundamentals became irrelevant and the only goal of acquiring an NFT was to sell it at a higher price (also known as flipping). In a general crypto winter, these practices will slowly fade away. The bear market is having a cleansing effect in the space and is filtering the good projects from the bad ones so that when the markets wake back up, the top projects of the space will mainly be only quality projects.