The next Beanie Babies?
The Future. Like crypto, NFTs are experiencing their own winter. Demand for digital tokens has cooled, generating a market where collectors can sell them as losses to help offset their income tax bills. While the jury is still out about whether the market will go back up, if it continues to decline, NFTs might become a fad (like our TY friends) more than the future of art.
The recently launched service Unsellable buys NFTs for a fraction of their original price and gives collectors an official receipt for tax purposes. Unsellable now has 5,000 NFTs — a number which is expected to triple by the end of the year, reports The Guardian.
- More than $19 billion was spent on NFTs between January and March 2022. Since then, monthly spending has dropped by 87%, according to the blockchain analysis firm Chainalysis.
- 144,000 NFTs were sold for $142 million in January 2022. This week, there were 17,000 sales for $28,000, according to the Nonfungible.com market tracker.
The most traded NFTs are from the Bored Ape Yacht Club, whose parent company Yuga Labs was hit with a lawsuit this month. Yuga Labs was accused of over-hyping the value of its digital tokens with celebrity endorsements from Justin Bieber, Paris Hilton, Madonna, Jimmy Fallon, and Kevin Hart.
At the beginning of 2022, investing in NFTs seemed more like a calculated risk than a potentially foolish endeavor. Now, it recalls Beanie Mania from the ’90s.
Still, the intention behind NFTs — to bring art online from creators of all levels of celebrity, from unknown to well-known to very well-known — is forward-looking. If NFTs fail to have longevity, hopefully, there’ll be another, more dependable market to replace them.