You could scarcely of made it through 2021 without hearing about NFTs, which have taken the crypto space and art world by storm.
Non-fungible tokens – essentially a digital receipt recording ownership of digital and physical assets such as art, videos, wearables or objects on a blockchain – have entered the cultural mainstream with a seemingly unstoppable force . The most memorable NFT projects and sales of 2021 are a testament to the bizarre trends which have encouraged millions of new investors to dive into the crypto space this year.
After auction house Christie’s sold Beeple’s digital artwork ‘Everydays: The First 5000 Days’ for $69m in March NFTs were catapulted into the public eye. The record sale turned obscure digital creator, Mike Winkelmann, into one of the world’s most valuable living artists overnight.
As interest in NFTs accelerated, global trade volumes for NFTs reached $10.7bn in the third quarter of 2021 alone . Amid a red hot market Christie’s the 250-year-old auction house made $150m from sales this year.
A clear winner from the 2021 hype around NFTs was the Bored Ape Yacht Club.
The project’s rise has been meteoric. When an obscure website selling NFT images of cartoon monkeys emerged in April buyers were confined to a small community of die-hard crypto fans.
Fast forward six months and Adidas has announced it plans to partner with the Bored Ape Yacht Club signalling that the trend has caught the attention of major fashion retailers.
The project, which features 10,000 unique images of cartoon apes, has seen its floor price reach $241.7k, with the garish images regularly fetching over a million dollars each. In recent weeks celebrity A-listers including Post Malone, Jimmy Kimmel, Diplo and DJ Khaled have jumped on the band wagon.
International sportswear brand Adidas was one of the first retailers to take the leap into the NFT space.
Its partnership with the Bored Ape Yacht Club and Sandbox, a metaverse building platform, signals that fashion brands are exploring the long term potential of NFT-based clothing.
Nike, which recently snapped up an NFT fashion start up, and Boohoo, which launched its first line of digital clothing this month, have plans to create clothing for digital avatars in the metaverse.
Melania Trump’s decision to launch a line of fungible, non-fungible tokens shows that everyone and anyone is trying to cash in on the craze.
The former first lady of the United States has been selling a watercolour painting of her eyes accompanied by a recording of herself reading out an inspirational message in a bid to raise money for charity.
Never mind that making unlimited copies of an artwork somewhat defeats the purpose of purchasing a unique ownership token, Melania Trump is willing to sell the artworks to anyone happy to shell out $202.
NFTs: here to stay?
After a momentous year for NFTs It’s safe to say that not everyone is sold on the concept of blockchain based ownership.
“This is something which really does create a divide,” said Tyler Welmans, who co-founded Deloitte’s Blockchain Lab. “If you own an NFT of a Bored Ape other people can still see it or download it.” “One argument is that exactly the same is true of the Mona Lisa. You can still see the Mona Lisa and get a print to put on your wall, but that doesn’t detract from the value of actually owning it,” Welmans said.
Deloitte’s Suchitra Nair said that while “over time what the market defines as being valuable will change” the assets behind NFTs provide “a basis to their value which a number of crypto assets do not have.”
“I think we’ll see a lot of volatility and then the market will settle into things which are deemed to be more or less valuable,” Nair said.
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