By all accounts, crypto is at a crossroads. Across the markets, the legal and regulatory landscape, and the Web3 startup ecosystem, there is little disagreement among industry leaders as to whether 2024 could be one of the most influential years in crypto yet. Whether these events will ultimately lift the industry out of winter to new heights or endanger it remains another question.
But don’t panic, dear reader. While nothing about the future can ever be certain – especially when it comes to crypto –Declutter spoke to analysts from the financial, policy, and NFT worlds to get a behind-the-scenes look.
After exploring the impact of a spot Bitcoin ETF, how Bitcoin and TradFi will ultimately merge, and when we get regulatory clarity in the United States, here’s a look at whether NFTs are poised to rebound in 2024.
Amid the ongoing crypto bear market, few asset classes have fared worse than NFTs. Even recent, modest gains for NFT trading volume The sector is still down a whopping 93% from the crazy highs of early 2022.
A sign of the extent of the slump: even the term NFT itself has become a household name dirty word in most circles. When crypto markets eventually recover, will NFTs be able to join in?
Pedro Herrera, head of research at DappRadar, is confident that NFTs will see a big revival in 2024. But he’s not talking about the profile photo (PFP) market.
“Collectibles that we were so used to in 2021, for example Bored monkeys And CryptoPunkshave become slower,” Herrera said Declutter. “People are starting to understand the real concept behind NFTs, which is proving ownership, authenticity, etc.”
Herrera believes that the technology underlying NFTs has finally matured to the point where it can begin to realize its full potential – a potential that goes far beyond facilitating the exchange of JPEGs of cartoon animals.
He points to developments in sectors such as tokenizing real possessions (“Imagine your mortgage as an NFT!”), gamingand the metaverse – which experienced its own hype crash last year, but Herrera expects to bounce back at full speed with the proliferation of high-end AR and VR hardware like the upcoming Apple VisionPro.
“We’re starting to see a lot of use cases beyond simple collectibles,” Herrera said. “I think that trend will continue strongly in 2024.”
That does not mean that all PFPs are dead, the analyst wants to make clear. A handful of blue chip NFT collections such as Pudgy penguinsBored Ape Yacht Club and CryptoPunks have succeeded – either through first mover advantage or smart tactics– to evolve collectibles from the past into strong IP brands with value on both a digital and physical level.
That handful of collections should now be able to grow and develop with the NFT industry as it matures, Herrera believes. But as the NFT industry emerges from crypto winter and moves into the next phase, the vast majority of NFT collectibles will likely miss the boat.
“Unfortunately, 90 to 95% of the collections we saw during the NFT bull run are not coming back,” he said.
Edited by Andrew Hayward