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What Is Happening On NFT Ecosystem And What You Should Know About NFT Hype

Can NFT Market Recover And How It Can Be Possible?

By Giorgi MikhelidzePublished 2 years ago 3 min read

The cryptocurrency world faces serious problems in 2022. At the peak of popularity in 2021, the scenario immediately and massively changed. Beginning in 2022, cryptocurrency trading and the whole blockchain ecosystem faced to high risk of collapse. Even though this digital market is recovering step by step, the damage is still serious and touches dozens of thousands of people around the world.

As you know NFT is based on blockchain technology and is mostly ETH-based. So, problems in the crypto world had an influence on the NFT market too. As the interconnection between NFT and freefalling crypto prices is undeniable, for a successful NFT business, it is needed to get deeper into the current hype. In this article, we will review every needed detail which currently has to be considered by every NFT creator or collector.

What Is Happening To the NFT Market? Is It Falling?

Before we start outlining the main points of NFT hype, let’s overview what NFT industry success is based on. There are some primary factors. Firstly, it is art because this is what the NFT idea is built on. Then we can consider profile pictures which can be financial or luxurious products. Then comes membership in the market and interest rates from existing or potential investors.

The peak of the NFT industry's success was in the winter of 2022. In summer the value significantly reduced is below the 500 mln USD. Specific NFT market values are also dropped. For example, before 2022, OpenSea was one of the leading NFT marketplaces but now its value is reduced by 75%.

This massive price reduction negatively affected the most successful NFT artworks too. For example, one of the portraits from Bored Ape Yacht Club's prices was reduced to 67 ETH in August 2022, which is about 106 000 USD. The same happened to the Mutant Ape portrait. Its current price is about 13 ETH, the same as 20 000 USD.

Comments from experts are different. Some of them think that the NFT market is already dead and will not be popular for a long time. On the other hand, the second part of NFTplayers thinks that the massive hype is about to end and everything will return to normal.

Even though the level of the problem divides society into two parts, the causing reason for this massive hype remains unchangeable. NFT market value reduction is caused by the current cryptocurrency crash. It automatically reduced the number of NFT workers as well as buyers. As ETH was the dominant currency in the NFT industry, its price crashed to 1 400 USD, reducing NFT values too. On the other hand, the interest rate was reduced too. According to Google results, the rate was reduced to 83%. This is how one of the most fast-growing markets now is not considered a good investment for new players, because of its high-risk level and reduced interest.

Can NFT Market Recover And How It Can Be Possible?

The central way of recovering the NFT market is to enhance customer attributes. This includes increasing non-investment income via creating new content in Metaverse. This is only one variation of how the market can create a new trend that will again be under massive attention. Even though experts are predicting different future scenarios for the NFT industry, all of them claim that the most effective way to recover from this ongoing hype is to create a new trend. The market needs something unique, as Bored Ape Yacht Club was for the first time.

Finding new directions remains the main recovery way because dependence on cryptocurrency value contains more risk. The nature of the crypto market is cyclical. Also, it is hard to predict. Because of uncertainty and influential fluctuations, it is better to focus on increasing the interest rate for investors because most of them are already in the wait-and-see stage.

How can NFT players become interesting to investors again? There are some popular opinions about them. For example, using sharing revenues is a great way to receive money and keep ownership at the same time. This will be the new window for investors to keep their existing assets and wait until the period of increasing popularity. The value will rise as soon as the artist's popularity grows. The same method is frequently used in the music industry.

Another popular opinion is to make a massive focus on the Metaverse because it has a big future and a high chance of success. According to the latest results, Metaverse's future potential is to increase its total value by 5 trillion USD by 2030. As Metaverse includes the NFT industry as one of the essential components, the NFT market can keep focusing on developing with small steps. Because if the current predictions are real, the industry value will be more than 230 billion USD by the end of the decade.

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    Giorgi MikhelidzeWritten by Giorgi Mikhelidze

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