The CEO of an NFT platform featuring tweets from Elon Musk and Jack Dorsey breaks down where the market goes from here – and dissects the Tesla founder’s cult-like personality

Cameron Hejazi
Cameron Hejazi, CEO and co-founder of Cent, Valuables’ parent company.

  • Elon Musk pulled out of selling one of his tweets as an NFT, but users of NFT platform Valuables are still trying to buy them.
  • Valuables, owned by the social media platform Cent, allows users to turn tweets into NFTs and buy or sell them.
  • The thrill of the chase and fandom culture attract users, Cent CEO and co-founder Cameron Hejazi told Insider.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Earlier this year, at the height of NFT-mania, Tesla chief executive Elon Musk first minted a tweet of his as an NFT and then retracted the offer to sell it after receiving bids of up to $1 million. “Actually, doesn’t feel quite right selling this. Will pass,” he tweeted.

His admirers however have not stopped trying to buy his tweets. Through the platform Valuables, which also sold Twitter CEO Jack Dorsey’s first ever tweet as an NFT, offers have been pouring in for Musk. So far this week, 29 bids have been made on Musk tweets, worth over $15,000 in the cryptocurrency ether.

“It is very much thrill-oriented and status-oriented and, you know, frankly fandom-oriented. Elon has the most bids on his tweets because he has so many fans. And these are fans expressing their fandom…It’s that fandom that really drives them to engage in this behaviour,” Cameron Hejazi, CEO and co-founder of Cent, the blockchain based social media company that created Valuables, told Insider in an interview this week.

Valuables’ concept is simple – anyone can bid on tweets, or mint their own tweets to then sell. The authors of tweets can accept, or reject offers, users can out-bid one another or re-sell NFTs they previously purchased. Transactions are made with the cryptocurrency ether.

Minting a tweet through Valuables turns it into a NFT, a non-fungible token that is based on blockchain technology. NFTs are digital assets, like images, video, audio – or tweets. Ownership is recorded on blockchain ledgers.

Since its 2020 launch, Valuables has accumulated 53,000 users who have made transactions worth $3.2 million.

“Behind every NFT there is a person, story and a message. Those three elements combined give it value. Art works in the same way, but NFTs can move faster and they are more transparent and accessible to the public,” one user explained. “It’s a new type of human interaction that never existed before”, he continued.

Others go even further: “NFTs become a part of your identity”, another NFT trader said.

Fandom and admiration play a key role in users bidding on NFTs. “I felt like I had to have that tweet signed by Charles Hoskinson,” one bidder told us. Over the past month, he spent over $6,762 on NFT tweets. ‘I found out there’s something addictive about these things!” the trader told Insider.

“I definitely think that there’s aspects of gamification that can go into play here. Things like for instance trading specific moments or building a collection of moments…I do think that it will definitely solidify as a collectible like trading cards.” Hejazi told Insider.

At the moment, most of the excitement comes from the bidding process before a purchase is made, he said.

But some users are starting to see an increased post-purchase value. “When people buy one of those tweets, I’m autographing a piece of history and then also sharing with them a backstory that nobody has ever heard before,” another seller said.

Valuables is also trying to expand the thrill and experience beyond bidding. “The goal for us is to even get it beyond that right, even beyond just the fandom collecting aspect, it’s to really make it so that it ultimately fosters a connection in some meaningful way that’s real, that’s not just one sided, that’s not just on the fan side, it’s between the fan and the creator and so that’s where we’re actively exploring.” Hejazi said.

Read the original article on Business Insider

Jay-Z and Andreessen Horowitz back a $19 million investment in NFT platform Bitski

Jay-Z

An NFT platform that’s branding itself as the “Shopify for NFTs” raised $19 million in Series A funding from investors including Andreessen Horowitz (a16z) and Jay-Z.

Bitski is an NFT marketplace that aims to enable brands to easily create and sell non-fungible tokens through its platforms. Its website encourages content creators to “jump in, zero blockchain experience required,” and allows users to purchase digital art with credit cards.

A16z’s Sriram Krishnan said the venture firm led the Series A funding round and he will be joining the Bitski board.

“We have a number of investments focusing on NFTs and the metaverse – from Dapper Labs to OpenSea. It only stands to reason we invest in the infrastructure that makes NFTs accessible,” Krishnan said in a blog post.

Other investors in the funding round include Serena Williams, MrBeast’s Night Media, and Ari Emanuel, Endeavor CEO. Galaxy Digital, Winklevoss Capital, and Coinbase Ventures participated in a $1.81 million seed funding round in November 2019 for Bitski.

The popularity of non-fungible tokens has boomed in 2020, though some warn that a bubble is forming and ready to burst, particularly in the market for NFT art.

Read the original article on Business Insider

From Solana to Chainlink to Chiliz, here are 15 altcoins headlining a world of tokens that extends well beyond bitcoin – and what they’re all used for

The photo shows physical imitations of cryptocurrency
  • Bitcoin may be the most know cryptocurrency, but there is a world of altcoins out there with their own specific uses.
  • Apart from currencies, these cryptoassets have various utilities from “proof of stake” to decentralized finance.
  • Insider collected the most common types of cryptocurrencies and 15 examples from a wide world of digital assets.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Investing in cryptocurrencies has been synonymous with investing in bitcoin, especially for those new to the digital asset space. Bitcoin, after all, is often regarded as the first modern cryptocurrency, founded by an anonymous developer under the pseudonym Satoshi Nakamoto in 2009.

“We think bitcoin had the first-mover advantage,” Ian Balina told Insider. Balina is the founder and CEO of Token Metrics, a data-driven investment research platform for cryptocurrencies.

Today, bitcoin boasts of a $1 trillion dollar market capitalization and enjoys the support of 22 public companies, according to data by CoinGecko. These include major firms from MicroStrategy to Tesla. Not included in that number are major corporations adopting bitcoin such as Goldman Sachs, Bank of New York Mellon, and PayPal.

Ether comes in at a close second. The global and open-source platform for decentralized applications that runs on the ethereum blockchain, is the runner-up to bitcoin with a valuation of $318 billion. Many analysts predict it will surpass the king of cryptocurrencies down the road, citing ether’s ability in storing computer codes that power contracts and applications.

Beyond these two, there is a wealth of crypto assets in the nascent space all with different utilities.

“We’re thrilled about the growing adoption of crypto beyond bitcoin,” Greg King, CEO of Osprey Funds, a crypto asset manager that launched Osprey Bitcoin Trust, told Insider. “Investor and market appetite continues to grow for funds providing access to some of the most exciting coins and tokens.”

While cryptocurrencies are difficult to separate into neat and comparable categories, London-based fintech entrepreneur Viktor Prokopenya said the underlying popularity metrics can be borrowed from more traditional asset analysis. He named market capitalization, price volatility, and momentum as examples.

“I believe we will see an increasing disregard for traditional portfolio theory and a reduction in diversification by many retail investors,” he told Insider. “Of course, this could work out for the better but conventional prudence is advised.”

Insider, with the help of experts, lists here the five most common types of crypto uses with 15 examples of coins from across the space.

1. Currencies

This is the most commonly known utility of cryptocurrencies. Several companies have allowed the purchase of their products using cryptocurrencies such as Tesla car, while dogecoin can be used to buy Dallas Mavericks’ tickets and merchandise. Other currency examples are litecoin and bitcoin cash.

2. Stablecoins

A stablecoin is a type of cryptocurrency that is backed by a reserve, which could be a cryptocurrency, a fiat currency, or a commodity. For instance, tether is pegged to the US dollar. USD coin-created by Coinbase and Circle-and dai are also both pegged to the American currency.

3. Proof of Stake

This is a mechanism that regulates the process of transactions between users, ensuring that these are verified and added to a blockchain’s public ledger. PoS was born out of another popular algorithm, Proof of Work. Both have the same goal of reaching consensus in the blockchain, Binance Academy explained, and only differ in the process.

Examples of cryptocurrencies that use PoS are ether (decentralized applications), cardano (academic research), and solana (blockchain applications).

Read more: A 29-year-old self-made billionaire breaks down how he achieved daily returns of 10% on million-dollar crypto trades, and shares how to find the best opportunities

4. Decentralized Finance

Also known as DeFi, this is an umbrella term for various applications that use public blockchains and crypto assets to disrupt the traditional financial sectors. DeFi is an alternative to a system that is tightly controlled and held together by decades-old infrastructure, according to a website funded by the Ethereum Foundation.

DeFi, an industry now worth over $66 billion, is a major reason for ether’s recent record-breaking week during the end of April.

Other cryptocurrencies that use DeFi applications according to Balina are: uniswap, a decentralized exchange for trading ethereum-based tokens via an automated order book; chainlink, a decentralized oracles network for bringing off-chain data onto the blockchain; and aave, a decentralized lending platform.

“In the last few years, we have seen DeFi also take up a significant spot within any listing category,” Ben Weiss, CEO of bitcoin ATM operator CoinFlip, told Insider – adding that many factors remain to be seen after the London upgrade in June.

Weiss continued: “I would expect the DeFi space to grow as the momentum of both DeFi usage as well as innovation is growing in the billions of dollars every other day. Decentralized market makers like uniswap and pancakeswap changed what it means to be liquid and crypto accessibility in general.”

5 . Non-Fungible Tokens

NFTs are unique digital assets secured on a blockchain supported by ethereum. Each NFT has its own signature, which can be verified in the public ledger and cannot be duplicated. When people buy NFTs, they gain the rights to the unique token on the blockchain, and not the artworks, collectibles, or tweets linked to the NFTs themselves.

Many of these are built on ether, Osprey said, but flow, tezos, and algorand also support NFTs.

“The potential applications of NFT technology are virtually endless,” he added. Other examples are theta network (video streaming blockchain) and chiliz (sports industry).

Read the original article on Business Insider

Investors are using a new platform to bid thousands on NFTs of Elon Musk’s tweets. We spoke to its CEO about the Tesla’s founder cult-like following – and where the market goes from here.

Cameron Hejazi
Cameron Hejazi, CEO and co-founder of Cent, Valuables’ parent company.

  • Elon Musk pulled out of selling one of his tweets as an NFT, but users of NFT platform Valuables are still trying to buy them.
  • Valuables, owned by the social media platform Cent, allows users to turn tweets into NFTs and buy or sell them.
  • The thrill of the chase and fandom culture attract users, Cent CEO and co-founder Cameron Hejazi told Insider.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Earlier this year, at the height of NFT-mania, Tesla chief executive Elon Musk first minted a tweet of his as an NFT and then retracted the offer to sell it after receiving bids of up to $1 million. “Actually, doesn’t feel quite right selling this. Will pass,” he tweeted.

His admirers however have not stopped trying to buy his tweets. Through the platform Valuables, which also sold Twitter CEO Jack Dorsey’s first ever tweet as an NFT, offers have been pouring in for Musk. So far this week, 29 bids have been made on Musk tweets, worth over $15,000 in the cryptocurrency ether.

“It is very much thrill-oriented and status-oriented and, you know, frankly fandom-oriented. Elon has the most bids on his tweets because he has so many fans. And these are fans expressing their fandom…It’s that fandom that really drives them to engage in this behaviour,” Cameron Hejazi, CEO and co-founder of Cent, the blockchain based social media company that created Valuables, told Insider in an interview this week.

Valuables’ concept is simple – anyone can bid on tweets, or mint their own tweets to then sell. The authors of tweets can accept, or reject offers, users can out-bid one another or re-sell NFTs they previously purchased. Transactions are made with the cryptocurrency ether.

Minting a tweet through Valuables turns it into a NFT, a non-fungible token that is based on blockchain technology. NFTs are digital assets, like images, video, audio – or tweets. Ownership is recorded on blockchain ledgers.

Since its 2020 launch, Valuables has accumulated 53,000 users who have made transactions worth $3.2 million.

“Behind every NFT there is a person, story and a message. Those three elements combined give it value. Art works in the same way, but NFTs can move faster and they are more transparent and accessible to the public,” one user explained. “It’s a new type of human interaction that never existed before”, he continued.

Others go even further: “NFTs become a part of your identity”, another NFT trader said.

Fandom and admiration play a key role in users bidding on NFTs. “I felt like I had to have that tweet signed by Charles Hoskinson,” one bidder told us. Over the past month, he spent over $6,762 on NFT tweets. ‘I found out there’s something addictive about these things!” the trader told Insider.

“I definitely think that there’s aspects of gamification that can go into play here. Things like for instance trading specific moments or building a collection of moments…I do think that it will definitely solidify as a collectible like trading cards.” Hejazi told Insider.

At the moment, most of the excitement comes from the bidding process before a purchase is made, he said.

But some users are starting to see an increased post-purchase value. “When people buy one of those tweets, I’m autographing a piece of history and then also sharing with them a backstory that nobody has ever heard before,” another seller said.

Valuables is also trying to expand the thrill and experience beyond bidding. “The goal for us is to even get it beyond that right, even beyond just the fandom collecting aspect, it’s to really make it so that it ultimately fosters a connection in some meaningful way that’s real, that’s not just one sided, that’s not just on the fan side, it’s between the fan and the creator and so that’s where we’re actively exploring.” Hejazi said.

Read the original article on Business Insider

Billionaire Mark Cuban highlights rampant speculation in crypto – but says that’s always the case with transformative technologies

Mark Cuban
Mark Cuban.

  • Mark Cuban acknowledged there’s rampant speculation in cryptocurrencies.
  • The billionaire investor said revolutionary technologies often generate hype.
  • Cuban defended the boom by pointing to the growing number of uses for crypto.
  • See more stories on Insider’s business page.

Mark Cuban recognizes lots of people are buying cryptocurrencies, not because they view them as fundamentally valuable, but because they expect others to buy them and drive their prices higher.

“Yes there is massive speculation,” the billionaire “Shark Tank” investor and Dallas Mavericks owner tweeted on Wednesday. However, he argued plenty of transformative technologies sparked feverish excitement as they took off.

“Every single one of the technologies has been dismissed by legacy institutions,” he continued. “Until they weren’t.”

Cuban made those comments in a Twitter thread defending crypto as a revolutionary innovation. He was responding to criticism that his aggressive promotion of dogecoin, a “meme coin” that was created as a joke, would result in buyers losing a bunch of money.

The technology entrepreneur – who became a billionaire by selling his internet-radio startup, Broadcast.com, to Yahoo in 1999 – has been one of dogecoin’s biggest promoters. He went on “The Ellen DeGeneres Show” this week to reiterate his view that the coin is a fun way to learn about crypto, and a better bet than a lottery ticket.

Cuban also highlighted the growing number of uses for crypto in his thread. He suggested non-fungible tokens (NFTs) for digital collectibles, smart contracts, and decentralized finance (DeFi) could fuel demand for digital currencies and underpin their prices in the future.

“If you look at crypto assets whether eth, doge, btc, mkr etc and only see something intangible for people to trade, you haven’t really looked,” he said, referring to ether, dogecoin, bitcoin, and dai. “If you see smart contracts and programming languages and think of new ways to disrupt industries then I’m saying there’s a chance.”

Unsurprisingly, dogecoin has its fair share of critics. Michael Burry of “The Big Short” fame dismissed it as a “doge’s breakfast” and one of several market bubbles, while billionaire investor and bitcoin bull Mike Novogratz warned against buying it and described it as a “dog.”

Read the original article on Business Insider

The red-hot NFT market is starting to cool off, as both prices and volumes fall. These 3 sectors are the hardest-hit so far by the slowdown

NFT art

After going stratospheric earlier this year, the red-hot NFT market is starting to cool down. Based on data from nonfungible.com, a tracking and analysis hub for the non-fungible tokens (NFTs), almost every sector has seen a decline both in terms of sales and dollars spent in the last month.

The art sector, where a piece of digital work recently changed hands for a record of nearly $70 million, lost the most ground, followed by the sports and collectibles sectors.

The total amount of NFT sales has declined by almost 28% and the total value of sales fell by almost 14% between March 30th and April 28th, data showed.

NFTs are digital assets such as videos, images, or audio that are based on blockchain technology. They are unique and not exchangeable. Often, anyone online can still access them – but crucially, only one person can own them.

Sale volumes for art NFTs declined by almost 42%, making this the sector with the biggest losses. In the same timeframe, prices dropped by 40.5%. This translates to a sales value drop from over $71 million to $41.5 million as of today.

Crypto artworks had led the NFT craze and were selling for record highs just a few weeks ago. Digital artist Beeple set a record by selling a piece of art for $69 million at a Christie’s auction in March.

Sports and collectibles NFTs followed in second and third place. Sports NFTs, which include player cards, virtual racing cars and even digital racing horses, brought in over 28% less cash and sales declined by over 20%.

Collectibles, which include some of the earliest NFTs like CryptoPunks and CryptoKitties, and are commonly part of a series, saw a price decline of 17.3% and a drop of over 32% in sales. Both prices and sales started to recover in mid-April, but are heading for an overall decline this month.

Collectibles are also the most valuable sector, worth just under $101 million at the end of April, according to the site. In March, the sector was still worth almost $122 million.

The only sector that grew in terms of both sales volume and dollars spent is metaverse – where virtual plots of land and digital real estate are sold. Despite only adding 1.4% sales volume, prices spiked by almost 32%. Metaverse NFTs sold on April 28th were worth almost $21 million.

Gaming NFTs, which are purchasable parts of online games such as a specific player, saw sales volumes decline by around 18%, but were still worth over 123% more, as dollars spent in this sector more than doubled over the last month, reaching over $26 million.

Read the original article on Business Insider

How NFTs could change global business models beyond the art industry

Grimes NFT
Grimes’ Battle of the WarNymphs NFT on Nifty Gateway.

  • NFTs are tokenized versions of unique assets like works of art that can be traded on a blockchain.
  • They create opportunities for business models that didn’t exist before, like artist stipulations.
  • Future NFT developments could transform markets like property, vehicles, and land ownership.
  • See more stories on Insider’s business page.

Sotheby’s has become the latest establishment name in art to dive into NFTs (non-fungible tokens) through its collaboration with anonymous digital artist Pak and NFT marketplace Nifty Gateway.

The auction house sold The Fungible Collection, a “novel collection of digital art redefining our understanding of value,” for more than $17 million (£12 million).

Some pieces, such as “The Switch,” a monochrome 3D construction that is going to be changed by the artist at some unspecified moment in the future, received bids well in excess of $1 million.

Read more: A digital artist who made $700,000 off one NFT drop explains how to stand out as a creator and thrive at selling virtual art

For the uninitiated, NFTs are tokenized versions of assets that can be traded on a blockchain, the digital ledger technology behind cryptocurrencies like bitcoin and ethereum. Whereas one bitcoin is directly interchangeable with another, meaning they are fungible, NFTs are the opposite because the underlying assets are unique in some way and can’t be exchanged like for like.

This uniqueness enabled Christie’s to sell digital artist Beeple’s “Everydays” NFT in March for an eye-watering $68 million. For those who don’t have that sort of money, NFTs are also being used for trading collectibles like baseball cards and computer gaming items like swords and avatar skins.

Bubble trouble?

The excitement around NFTs feeds a similar narrative to other recent price surges such as GameStop and dogecoin, in that these are speculative bubbles brought about by stimulus checks in the US, lockdown boredom, and low interest rates.

Look no further than celebrities like music star Grimes and YouTuber Logan Paul releasing their own flagship NFTs to ride the wave. Even Vignesh Sundaresan, the entrepreneur who bought Beeple’s record-breaking artwork, sees investing in NFTs as a “huge risk” and “even crazier than investing in crypto.”

But history also tells us to be careful about dismissing NFTs as a passing fad, since the importance of technological innovations often becomes clearer once the hype dies down. Many commentators dismissed the influx of tech companies around the dotcom bubble of the late 1990s, and the first wave of mass cryptocurrency enthusiasm in 2017, only to be proven hopelessly wrong when Amazon and bitcoin re-emerged.

NFTs themselves are actually well down from their highs, with a 70% drop in average price since February. Perhaps this is less the bursting of a bubble than a “weeding out” of gimmicky tokens now that the initial hype has begun to die down.

This phenomenon is captured well in US consultancy Gartner’s hype cycle, which illustrates the typical progression of a new technology. With NFTs, we are probably emerging from the “peak of inflated expectations” on a journey towards the same “plateau of productivity” that Amazon reached a long time ago.

This ties in with what Austrian economist Joseph Schumpeter said about why capitalism works. Schumpeter viewed capitalism as a relentless churn of old into new, as the latest and most innovative enterprises replace those that came before – he called this “creative destruction“.

In this light, NFTs are the newcomers challenging how we perceive and register ownership of assets. And the tension between innovation and incumbency also contributes to the skepticism that always surrounds such new technologies.

What happens next

NFTs create opportunities for new business models that didn’t exist before. Artists can attach stipulations to an NFT that ensures they get some of the proceeds every time it gets resold, meaning they benefit if their work increases in value. Admittedly football teams have been using similar contractual clauses when selling on players for a while, but NFTs remove the need to track an asset’s progress and enforce such entitlements on each sale.

New art platforms, such as Niio Art, are able to demonstrate in a really simple way that they own digital works. When customers borrow or buy art from the platform, they can display it on a screen in the knowledge that there is no issue with copyright or originality because the NFT and blockchain ensures that ownership is authentic.

NFTs give musicians the potential to provide enhanced media and special perks to their fans. And with sports memorabilia, between 50% and 80% of items are thought to be fake. Putting these items into NFTs with a clear transaction history back to the creator could overcome this counterfeiting problem.

But beyond these fields, the potential of NFTs goes much further because they completely change the rules of ownership. Transactions in which ownership of something changes hands have usually depended on layers of middlemen to establish trust in the transaction, exchange contracts and ensure that money changes hands.

None of this will be necessary in future. Transactions recorded on blockchains are reliable because the information cannot be changed. Smart contracts can be used in place of lawyers and escrow accounts to automatically ensure that money and assets change hands and both parties honour their agreements. NFTs convert assets into tokens so that they can move around within this system.

This has the potential to completely transform markets like property and vehicles, for instance. NFTs could also be part of the solution in resolving issues with land ownership. Only 30% of the global population has legally registered rights to their land and property. Those without clearly defined rights find it much harder to access finance and credit. Also, if more of our lives are spent in virtual worlds in future, the things that we buy there will probably be bought and sold as NFTs too.

There will be many other developments in this decentralized economy that have yet to be imagined. What we can say is that it will be a much more transparent and direct type of market than what we are used to. Those who think they are seeing a flash in the pan are unlikely to be prepared when it arrives.

James Bowden, lecturer in financial technology, University of Strathclyde and Edward Thomas Jones, lecturer in economics, Bangor University

The Conversation
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Record-breaking digital artist Beeple says the NFT craze is just like the dotcom bubble of the late 1990s

2021 03 11T160441Z_3_LYNXMPEH2A1D1_RTROPTP_4_AUCTION CHRISTIE S NFT.JPG
Vignesh Sundaresan bought Beeple’s “Everydays” NFT for $69 million

  • Beeple, whose digital NFT art sold for a record-breaking $69 million, said NFTs are like the early stages of the internet.
  • He told ‘The Street’ that even if NFTs are in a bubble, he thinks they will survive.
  • He said there was no reason why digital art should not have the same value as physical art.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Record-breaking digital artist Beeple, who sold a piece of digital art for a record-breaking $69 million, thinks the non-fungible token (NFT) market will evolve in the same way the internet did during the dotcom bubble of the late 1990s.

He told The Street that during the dotcom bubble, people realised there were a lot of worthless internet pages being set up, which they then stopped using and that he believes it will be similar for NFTs.

“There was a bubble with the internet, it didn’t kill the internet. People kept using the internet, it just kind of wiped out all the c***”, he said.

NFTs are digital items such as videos, visual elements or audio that are based on blockchain technology. They are unique and not exchangeable, so they are often viewed as collectors items. Usually, anyone can still see the NFT online, but only one person can own it.

Beeple believes digital art can have the same value as traditional art and that it will continue to be highly priced after the NFT hype is over and lower value content has been weeded out.

“If it creates emotional connection with people, it will have value,” he said. Creators and buyers can ensure that their work and investments will be worthwhile by keeping this in mind, Beeple said.

In March, a piece of Beeple’s digital art sold for a record-breaking $69 million at a Christie’s auction. The buyer later said investing in digital art was highly risky and he believed NFTs were in a bubble. Beeple himself has also echoed this and said a lot of crypto art will sink in price to the point where it becomes worthless.

Based on data collected by nonfungible.com, an NFT tracking and analysis hub, the value of art NFTs has been trending downwards for the past month. The number of sales, as well as the amount of money paid for them, have steadily been declining, as have the amount of unique sellers and buyers.

Read the original article on Business Insider

NFT sale prices are dropping, but experts say it might not be a bad sign

NBA Top Shot Press Logo_Collectibles_
NBA Top Shot.

  • The average price of NFTs dropped over 60% in April compared to February highs.
  • Experts say declining sale prices are not a bad sign for the overall NFT market.
  • Other crypto-art investors question whether the market is in a bubble.
  • See more stories on Insider’s business page.

The average sale price for crypto art has dropped over 60% from a February high, according to the market research site NonFungible.com.

On Friday, the average price for a non-fungible token or NFT was about $1,549 while average February prices were over $4,000.

Many people in the crypto space have speculated whether NFTs are in a bubble. After selling a crypto-art piece for nearly $70 million, digital artist Mike Winkelmann – also known as Beeple – told Insider he believed NFT prices could be in a precarious position.

Winkelmann, as well as Nifty Gateway co-founders Duncan and Griffin Cock Foster, have compared the recent NFT boom to the dawn of the internet and the bubble that followed.

Noelle Acheson, the managing director of research at CoinDesk, told Insider that interest in crypto art is likely far from over.

Read more: What you need to know about NFTs, the collectible digital tokens that are selling for millions online

“The NFT craze is not so much about prices and quick profit as it is about a new model of creative monetization, a new type of engagement with fans and a new cultural ‘experience’ for users,” Acheson said.

Beeple V4
Beeple’s record sale

While the average price of NFTs have fallen from their highest point in February, average crypto art prices have been fluctuating in recent weeks. Between February and the end of March, prices dropped 70% but have since climbed 30% from a low around $1,200 last month.

Melissa Gilmour, the founder of the London-based NFT agency Lily & Piper told CNN the price drop is likely not permanent.

“There are elements of a hype cycle in this one, but we still see it as an immense long-term opportunity,” she told CNN.

Still, March’s lows were far above where the NFT market was just four months ago. In January, the average price for a crypto art piece was about $195 – the year before it was $30.

Acheson told Insider prices evening out could actually be a good sign for the longevity of the NFT market.

“Just because something is settling down doesn’t mean it’s over,” Acheson told Insider. “Sale prices may very well continue to go down from these spikes we saw in February, but just look at where the market is from just three or six months ago.”

More people appear to have gotten into NFT trading. Data from CoinDesk’s Quarterly Review shows that NFT trading volumes rose to 25 times December volumes in March and they don’t appear to be slowing down. March sales volumes were up nearly 40% from February on top NFT marketplaces, according to CoinDesk’s data.

Acheson said the decrease in the average sale price of NFTs could be attributed to less outlying sales, driving up the overall average.

As NFT sales become more democratized and accessible, average sale prices will likely go down

Bhad Bhabie NFT
Bhad Bhabie dropped several NFTs

Data from NFT-tracking site DappRadar shows the volume and number of users across most popular NFT marketplaces is continuing to go up. Data from theblockcrypto.com shows the weekly number of NFT transactions are near February levels, with thousands of buyers and sellers trading every day across top platforms like NBA Top Shot and Sorare.

While mainstream sites like NBA Top Shots – a platform that recently received a $2 billion valuation from DappRadar – have largely driven sales volume, more accessible marketplaces like OpenSea and Rarible have become increasingly popular in recent months.

Investors have also turned their interest toward less curated sites like OpenSea, Rarible, and Mintable. In March, OpenSea received $23 million in funding from investors like billionaire Mark Cuban. Other platforms like Topps have already begun planning to launch an IPO.

More celebrities have also gotten into selling their own NFTs since February sales caught the national spotlight. In March alone, The Weeknd, Snoop Dogg, Halsey, and Shawn Mendes started selling their own digital art pieces on curated sites like Nifty Gateway, SuperRare, and Crypto.com.

While artists like Grimes and DJ 3LAU have had jaw-dropping sales, other artists have had less success.

Grimes NFT
Grimes Battle of the WarNymphs NFT on Nifty Gateway

Grimes showed the music industry how lucrative NFTs can be when she sold her collection for $5.8 million in under 20 minutes. In March, Shawn Mendes’ NFTs averaged only a couple thousand dollars a piece. The same month Halsey’s highest selling NFT was about $7,000, while others sold for under a grand.

Artists like 3LAU and producer RAC attribute their success to their history in the crypto world. While the world of NFTs continues to expand, the average price of the digital art pieces may also continue to drop.

As new buyers enter the space drawn in by big names, SNL skits, and flashy sales, they might be more inclined to invest more conservatively in NFTs. Music industry expert Cherie Hu told Insider newcomers to crypto investing will have more difficulty identifying valuable NFTs and will likely be less willing to spend large amounts of money on crypto-art drops.

“In most cases, it’s not your typical fan making these kinds of big purchases,” Hu told Insider. “Artists like 3LAU have built up a network of buyers in the crypto space.”

Furthermore, NFT creators that are new to the space may need more time to build up their credibility in the crypto world.

“[Investing in crypto art] is for people who are looking to take some risks,” Winkelmann said in an interview with The New York Times’. “Just making an NFT does not give it any value.”

Much like the internet bubble, NFT creators like Winkelmann and buyers such as NFT investor Pablo Rodriguez-Fraile believe that NFT prices will eventually drop, but the phenomenon of NFTs as viable investments will not go away.

“When the [internet] bubble burst, it didn’t wipe out the internet,” Winkelmann told The Times. “It wiped out the crap.”

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NFTs are now a pillar of the digital economy and bitcoin could destabilize gold, report says

2021 03 23T153223Z_1_LYNXMPEH2M171_RTROPTP_4_FIDELITY CRYPTOCURRENCY.JPG
  • NFTs play a key role in a digitalized society and show crypto can change the world, a report by eToro and The Tie says.
  • Bitcoin could destabilize gold within ten years, but is unlikely to replace the dollar according to the report.
  • NFTs and the global economy were the main influences in crypto in the first quarter, the report said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

NFTs are a pillar of the digital economy and could fundamentally impact our society, a report published by online broker eToro and The Tie earlier this week says. At the same time, bitcoin has the potential to destabilize the bullion market and become “digital gold” over the next ten years.

The report assessed the main influences on the crypto space in the first quarter of 2021, and found non-fungible tokens – or NFTs – and the state of the global economy, especially potential hyperinflation, were the dominant themes. In the last quarter of 2020, bitcoin had been the main factor.

Whether a damaging inflation spiral could develop is not clear, the report said. But it argues that factors such as increased money supply, the rally in the S&P 500 and the potential for asset bubbles are cause for concern.

For bitcoin, this means that it is unlikely to replace the dollar any time soon, but it does have the potential to disrupt other established assets, the report said.

“However, perhaps Bitcoin could destabilize gold in the next decade or so and be a modernized ‘hard asset,’ our digital gold for the new era,” it said.

For this to happen, investors would have to start prioritizing digital assets over physical ones and bitcoin would need to see its realized market value rise by 50% every year out to 2030, the report said.

“While these predictions seem far-fetched, it is incredible that bitcoin has even 2% of gold’s market cap after just ten years as a financial asset, when just a year ago, $50,000 seemed like a pipe dream,” the report said.

The NFT-mania of the last quarter shows how impactful crypto can be and that it has the potential to change the world, according to the report. NFTs themselves could also substantially impact society as more of everyday life moves online.

NFTs are unique digital assets such as images, or videos, that are based on blockchain technology. They surged in popularity this year, selling for record prices of more than $69 million in the case of one piece of digital artwork.

“As society becomes increasingly digital, there’s a need to cement ownership of digital work created and shared on the internet. NFTs solve the problems that exist within this space such as proof of ownership, uniqueness of digital assets, and scarcity,” the report says.

They are especially important to content creators who share their work online and are faced with digital platforms that profit from it, for example through advertising, which takes away from their earnings as creators.

“NFTs power a new creator economy where creators don’t hand ownership of their content over to the platforms they use to publicize it,” the report said.

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