NFTs: Are they still a thing to buy or not profitable in 2024?

NFTs - The Ledger Bloc

A few years ago, non-fungible tokens (NFTs) became super popular. NFTs are digital assets that show ownership of contents, like art or videos, and they’re recorded on a special technology innovation system called a Blockchain.

People went crazy over NFTs and spent lots of money on them. For example, a famous auction house called Christie’s sold an NFT artwork by Beeple for $69.34 million in March 2021. Another big sale was for 202 NFTs from something called the Bored Ape Yacht Club, which made $26.2 million at Sotheby’s auction.

However, after the huge surge, the trading of NFTs dropped massively, by a huge 97% in September 2022 compared to its highest point of $17 billion in January 2022, as Bloomberg explained back then. Although NFT sales have been slow lately, there was a really big sale in March: a CryptoPunk 3100 was sold for 4,500 ETH, which is about $16 million, as reported by Benzinga. Benzinga also suggested that this big sale might mean a comeback for NFTs.

Are NFTs still Profitable?

Anthony Georgiades, who works at Innovating Capital, said, “The NFT market has gone through a big hype cycle, with lots of collections going up, then down, and never getting back up.” But Georgiades pointed out that some really good collections have done well and seem like they’ll stick around for a while. “People enjoy digital art, so I think this part of NFTs will keep going strong,” he said.

Some experts also argue that the recent interest in NFTs is less about wild speculation and more about their practical uses in various industries. Lani Dizon, co-founder of Zenza Capital, emphasized that NFTs are expanding beyond digital art, finding roles in gaming, real estate, and digital identity. This diversification suggests a shift towards sustainable investment opportunities rather than mere hype.

Shiti Manghani, CEO of NFT gaming app STEPN, supported this view, highlighting the importance of NFTs’ utility. He stressed that investing based solely on price speculation is risky, emphasizing the significance of believing in the utility of a particular NFT.

Dizon outlined the advantages of investing in NFTs, including their versatility, ability to prove ownership, and improved accessibility through better platforms. However, she also cautioned about potential drawbacks, such as their volatility, liquidity challenges, and legal uncertainties, signaling that while promising, NFT investments still come with risks.

However, not all experts are optimistic about a complete resurgence of NFTs. Ilya Stadnik, CEO at Zent, expressed skepticism, stating that the influx of low-value images seen previously is unlikely to repeat itself. He suggested that while there may be some NFTs worth considering as investments, careful selection is crucial.

Stadnik emphasized that the majority of NFTs currently available are not worth the attention. He acknowledged that while a full comeback might not be on the horizon, advancements in technology offer hope for the transformation of the NFT market and its deeper integration into industries like gaming and online entertainment.

Final Thought

Some experts don’t see NFTs as good investments at all. They say that even when NFTs were really popular, they weren’t smart investments but were more like things people gambled on. “Knowing the difference between gambling and investing is really important. Lots of people who played with NFTs, GameStop, or other trendy stocks were just gambling, not investing,” explained Robert R. Johnson, a finance professor at Creighton University. “Gamblers might make a lot of money, but they’re also taking a big chance.”