Will the NFT Art Market See a Rebound in 2023?
Non-fungible token (NFT) art generated a lot of buzz in the early heady days with widely publicized lucrative deals such as the $69 million sale of digital artist Beeple’e artwork Everydays: The First 5000 Days.
However, those early record-breaking sales were soon dwarfed by the stream of negative news that plagued the industry such as crypto scams, volatility, and the crypto crash in 2022 where some of the biggest names in the industry, many of which had grown into crypto institutions in their own right, winded down their operations or filed for bankruptcy.
In spite of the spate of bad news, there is still some residual vitality left in the industry. Like Rasputin, the crypto industry keeps bouncing back long after its obituary had been penned by analysts and observers. There are lots of new crypto projects by major players that keep injecting some vibrancy into the industry. There are new projects by Amazon and Beijing-based Cafa Art Museum, proving that interest in digital art will endure beyond the 2022 crypto meltdown.
The absolute number of NFT transactions increased in 2022 but sales later plummeted 94% following the tumult in the crypto market.
How will the NFT market NFT pan out in 2023? What can we expect? Are we likely to see a rebound in NFTs and the boom in NFT sales that minted a fresh batch of crypto millionaires in 2020 and 2021?
The NFT boom began with the sale of Beeple’s Everydays: The First 5000 Days in 2021 for $69 million. That sale ushered in a vibrant and lucrative movement and increased interest in digital art.
The NFT movement was unique in the way it spawned a completely new generation and category of art consumers and connoisseurs that is, in most instances, different from conventional art consumers. However, NFT art has found its way into mainstream art auctions such as Christie’s.
An Elliptic report states that more than $100 million worth of art was stolen in crypto scams and art thefts between July 2021 and July 2022. The most expensive NFT art ever stolen was CryptoPunk #4324, which later sold for $490,000.
An ArtPrice.com report states the sales turnover plunged 94% even as the number of NFT art sale transactions marginally increased in 2022. The plunge in NFT sales turnover was triggered by the bigger storm in the cryptocurrency market.
Trade in NFT has now slowed down considerably. Not only are new projects coming to the fore but the corporates are still actively involved in NFTs, pumping in crucial dollars into the NFT economy.
Amazon, for instance, is reportedly planning to launch an NFT marketplace in April geared at satisfying the demand for digital art among collectors and NFT investors seeing an investment potential in the asset.
NFTs are making waves in China, too. The Cafa Art Museum based in Beijing is hosting an exhibition titled “Crypto Art: A New Possibility”, the biggest digital art exhibition ever.
The exhibition includes wide-ranging mediums such as digital art from a collaboration between the museum and the Dynamic Art Museum in Milan. The exhibition features artworks by 46 creators from 21 countries.
There is also a silver lining in the plunge of fortunes of NFTs over the course of 2022. At the height of its boom, the conversation around NFTs was focused on their investment or economic potential rather than on their artistic value. Now that they have lost much of their value, some see this as an opportunity to focus on the artwork for its own sake rather than as a soulless asset class.
Still, many see NFTs as something that is here to stay. For some, NFTs are just the next evolution of art and a new medium for limitless creative expression.
NFTs provide an innovative medium for connecting and collaborating within an innovative environment. As our worlds and experiences slowly shift from the physical to virtual realms, digital art also provides a new dimension for representing art beyond the physical world.
Many digital artists believe NFTs have staying power even after the catastrophic crash in 2022. For many, NFTs are more than just a crypto asset but a labor of love that will outlive market fluctuations.