Even though they’ve been around since 2014, it wasn’t until 2021 that this innovative technology really took off. Data from DappRadar, a marketplace for decentralised apps, shows that NFT sales topped $25 billion in 2021, up from $94.9 million the year before. They’ve gone viral in the fields of music, art, sports, and more, attracting the attention of celebrities and major corporations like American Express and Gucci. Financial blogger and YouTuber Humphrey Yang compare investing in NFTs to “almost like a leveraged gamble on crypto,” calling them “much riskier” than cryptocurrency purchases.
People buy them because they’re entertaining, even if they’re just gambling. Contrarily, many consumers are purchasing NFTs not as long-term investments but rather for the sheer enjoyment they provide. One of them is Laura Shin, a cryptography specialist. While she admits that her purchase of a music-themed NFT was irrational, she maintains that her motivations were more emotional than financial.
Why Have NFTs Suddenly Become So Commonplace?
Non-fungible is a term that has recently entered popular culture thanks to the likes of The Weeknd, Paris Hilton, and Jimmy Fallon. According to data compiled by DappRadar, NFT sales are in the billions, representing an annual growth rate of about 38,000%. In 2021, digital artist Beeple sold the most expensive NFT ever at auction for $69 million. Even a Saturday Night Live sketch on NFTs has been turned into one.
Why then, have NFTs suddenly become so well-liked?
The meteoric rise of NFTs in 2021 exemplifies the erratic nature of the adoption curve for new technologies, with various causes contributing to the phenomenon’s expansion.
The 2021 Bitcoin and Ethereum bull run attracted a large number of new investors to the cryptocurrency market. In addition, Yang argues that if you have even a little amount of cryptocurrency, you can easily begin investigating various types of crypto investments, including NFTs, staking, and more. NFTs also provided a new platform for creators to promote and commercialise their work in a way that was both open and legitimate.
Do non-fungible tokens warrant an investment?
NFTs are appealing to the risk-taker investor because they provide a one-of-a-kind, high-stakes potential to generate some extremely profitable returns; however, investors should be aware that this opportunity presents itself quite infrequently. If you’re searching for a more secure method to invest your money, an index fund could be a better option than a Pop-Tart kitten GIF, despite being less glamorous and lacking in the cultural cache. To take the plunge into the wild world of non-fungible tokens, though, you’ll need to get yourself a digital wallet. You should save your digital currencies and NFTs in this wallet.
To acquire an NFT, you’ll first need to locate one you like on a platform like OpenSea.io or Rarible, before purchasing the appropriate cryptocurrency for that NFT. Once that happens, all we can do is wait. You and your Pop-Tart cat are at the mercy of the market when it comes to the worth of your NFT, as its worth is contingent on how much other people are willing to pay for it.