Yona Gushiken
The recent resurgence in interest in Non-Fungible Tokens (NFTs) comes after a period of decline that started in 2022 and continued into the early part of this year. During this downturn, the prices and sales volumes of NFTs dropped significantly from their peak in 2021 and 2022.
However, a series of high-value sales of various NFT collectibles has sparked renewed interest and discussions about the potential rebound of the NFT market.
Historical Context
In 2021, the non-fungible token (NFT) market soared dramatically, fueled by a significant increase in cryptocurrency prices that drew a wave of new traders looking for opportunities in the sector. However, the advent of the crypto winter, compounded by the collapse of major crypto organizations such as Terra, Celsius, Three Arrows Capital, FTX, and Alameda Research, placed considerable stress on the market. Consequently, since Q3 2023, the NFT sector has seen a sharp 88% drop in trading volume, highlighting the severe impact of the crypto downturn.
Signs Of Revival
Despite the challenging environment for NFTs over the past few years, a series of substantial sales of several collectibles recently has sparked speculation that these could be early indicators of a potential revival in the NFT market. In the first few months of 2024, some significant NFT sales have occurred, indicating renewed interest and activity in the market:
- CryptoPunk 3100: This NFT, one of only nine Alien Punks and thus one of the rarest in the CryptoPunks collection, sold for 4,500 ETH in early March 2024, which was over $16 million at the time. This sale ranks as the sixth highest in the history of NFTs.
- The Nightclub Meme: On a Tuesday in 2024, this meme-based NFT was sold for 15 ETH, which was approximately $50,000.
- EtherRock NFT #46: In February 2024, this part of the EtherRock collection fetched 200 ETH, valued at around $498,000.
- ‘Buy Bitcoin’ Sign: Known from a famous meme, this NFT sold for $1 million in a recent week, underlining the continued cultural crossover appeal of NFTs.
- CryptoPunk #635: Another of the rare Alien Punks from the CryptoPunks collection, this NFT was purchased for 4,000 ETH, amounting to about $12.41 million.
These transactions suggest that, despite the previous market downturn, there’s a resurgence in collector interest, particularly in rare and culturally significant NFTs.
Insights from NFT Founders and Developers
Several NFT founders and developers have shared their perspectives on the recent surge in sales of meme NFTs, which have fetched millions. Overall, they expressed optimism about the resurgence of the NFT market, attributing it to various factors such as the unique value proposition of NFTs, their rarity, and the increasing interest from wealthy investors looking for new forms of value storage.
Clifford, the founder of Lumibots, the only robot-themed NFT collection in Shibarium accompanied by two specific types of SRC-20 tokens, LUMI and LUMS, viewed the recent surge in meme NFT sales with optimism, both as a founder and an investor.
He stated, “As a founder of an NFT project, I certainly hoped so, but as an investor in many different NFT projects, I will say I always found value in the asset class. I enjoyed the creativity and the art. Some I felt were better than others, but I believed NFTs had a perfect niche between in-real-life (irl) art and tokens in their ability to provide their owner with the possibility of different types of ownership, whether it be copyright or IP rights. Also, in most cases, each NFT was somewhat different even within a particular collection, adding a rarity aspect to the equation.”
He believed the resurgence in NFT interest was due to these qualities, as people were drawn to owning unique, non-fungible items. Additionally, he suggested that the trend might have been driven by wealthy investors looking for assets that appreciate over time, viewing NFTs as a potential future store of value.
SKIPPY, the founder of PixelPalz, a Shibarium ETF NFT Collection composed of 10,000 cute Anime-styled NFTs, with five traits and hundreds of attributes of different rarity, which creates hundreds of thousands of combinations, offered a critical perspective on the recent trends in meme NFT sales. He noted that while there had been a noticeable increase in sales, a majority of these projects failed quickly.
However, the small percentage that were backed by solid teams and had clear roadmaps and utility continued to grow and develop. SKIPPY highlighted the importance of evolving NFT standards in contributing to this resurgence, pointing out several new standards that were enhancing the utility and potential of NFTs within various ecosystems.
“There has indeed been a recent surge in the sale of meme NFTs, but unfortunately 99% of them rug and disappear within a couple of days. The 1% that have a real team, a real roadmap, with real utility, continue to build their community and utility and will continue to grow throughout the bull market. Some of these NFTs use new standards, for example the recent Sheboshis NFT, which uses the new DN404 standard, has enormous potential and utility within the Shibarium ecosystem,” the founder said.
“I believe that new standards are contributing to this resurgence. For instance, ERC721A, ERC6551, ERC721C, BRC721, SR2C20 and DN404, which are among the latest standards that developers and investors should keep an eye on,” SKIPPY noted, before adding, “These evolving standards cater to specific niches and use cases, expanding the scope and possibilities of NFTs, but as always DYOR!”
Dhel.Shib, one of the key individuals on the governing council running SleepyShibs, a collection of hand-drawn 2D art images with 83 unique traits, highlighted the recent surge in meme NFT sales as a fusion of digital culture, technological innovation, and economic opportunity. He emphasized that this trend showcased the potential of NFTs to encapsulate internet culture and reshape traditional views on ownership and value.
“The surge in meme NFT sales signaled a convergence of digital culture, technological innovation, and economic opportunity. This trend demonstrated the power of NFTs to capture the essence of internet culture and redefine traditional notions of ownership and value,” Dhel had said.
He cited key factors for the resurgence, including the growth of decentralized finance (DeFi), which offered new investment avenues, and increased mainstream interest, partly driven by celebrity endorsements. “Additionally, the ability of NFTs to offer unique, verifiable digital assets attracted attention from both creators and collectors alike, driving further growth in the market. However, it was essential for the NFT community to remain vigilant against issues such as copyright infringement, token plagiarism, and market manipulation to ensure the continued success and legitimacy of the ecosystem,” the key governing council member had said.
