What is the reason for the immense hype of NFTs in the market?
Even though NFTs were introduced several years back, they had no significant recognition for a considerable period. Their existence made a roar in recent times when some of the NFTs were sold at unexpectedly high prices. Fortunately, after a long wait, the NFT industry encountered recognition and popularity by attracting numerous creators and investors towards the NFT market.
Currently, the NFT industry is experiencing global popularity by being in the headlines for making sales of millions of dollars. The shocking selling amounts of NFTs grabbed the interest of numerous individuals in the crypto world resulting in the rapid development of the industry.
Let’s quickly see what NFTs are:
NFTs (Non-fungible tokens), the digital tokens represent real-life assets such as music, video, art and other objects that are unique and irreplaceable. The non-fungible property of these digital assets makes them non-exchangeable, thus, one NFT cannot be interchanged or exchanged with another NFT despite having the same values. Blockchain technology is utilized to offer security to the ownership rights of the NFTs.
In the prevailing time, the craze for NFTs has reached an extremely high point. Individuals are paying millions to gain ownership of rare digital assets. NFT industry has grown significantly when the biggest celebrities decided to step into the market with their tokenized content.
Amitabh Bachchan, one of the biggest Bollywood personalities, sold his NFTs’ collection in November for $966000. One of his NFTs named “Madhushala”- a poem recorded in the actor’s voice, was sold at the price of $756k. The rest of his NFT collection contains his autographed vintage posters and other essential assets related to his life journey.
Salman Khan joins the industry with the launch of his NFT collection in October 2021 and, other artists like Rajnikanth, Kamal Haasan, Dinesh Karthik, Rohit Sharma and many others have also entered the NFT industry by launching their respective NFT collections.
Mike Winkelmann, a US-based artist has sold his NFT at a huge sum of $60 million. His NFT was a digital form of one of his artworks.
The involvement of celebrities in the NFT sphere considerably elevated the growth of the industry. The artists are dropping their NFTs by connecting with an Entertainment Industry Based NFT Marketplace. Not only does this scenario has benefited the NFT market but also helped the celebrities to strengthen their bond with their followers or admirers. People can easily purchase their favorite celebrity’s NFTs when dropped on an online platform.
Why are NFTs being sold at unreasonably high prices?
This question certainly makes sense for the newcomers in the NFT sphere and is the first thing that strikes a beginner’s mind after being familiar with NFTs. People are paying millions for a digital asset that can be copied easily. Isn’t it strange that a picture that has been sold recently for a huge sum of money can be downloaded simply using the internet? Is there really any benefit of purchasing or investing in NFTs?
Well, there must be something in the NFT’s concept that makes it extremely valuable. Let’s clarify these doubts with the below-mentioned reasons and examples:
NFTs are unique: That’s the most notable part of the NFTs that they are rare and unique, no other asset can become its replacement. People love purchasing a rare thing that no one else has and that’s why they are willing to pay even millions just for digital art, music or another collectable.
The ownership rights: When a person makes a purchase for an NFT, say a painting, he gets rewarded with complete ownership rights over that painting. Nobody else can claim his rights over that NFT unless the owner decides to sell it. The ownership of the NFT is stored and secured with blockchain technology.
Elevation in value: NFTs being irreplaceable, gain considerable rise in their values over time. The investors can buy the NFTs early when they are dropped and sell them afterwards at higher values. NFTs cannot be traded like cryptocurrencies or stocks as their value depends on various factors in the market. All the NFTs are different and their values completely rely on the demand and the values a person is willing to pay for it. Before investing in the NFTs, investors must consider the demand and scarcity of the NFTs.
The reason to purchase an NFT may vary from person to person. Someone is buying it just because he wants to spend his money on having a scarce asset that others cannot have. Others may be looking at NFTs as a great investment opportunity. No matter what the reason is, their enormous prices make them special in the market.
How and where are NFTs bought or sold?
A person who is willing to create, sell or buy NFTs can do it simply by accessing a suitable NFT Marketplace. NFT Marketplace is a platform that offers the opportunity to sell and buy NFTs. Every NFT Marketplace differs as different types of tokens are traded on different Marketplaces. Some offer the chance to buy and sell gaming assets whereas others may be involved in music or sports collectables. Some may offer services for selling and buying all kinds of NFTs.
A gradual increase has been acknowledged in the launch of the new NFT marketplace for artists as celebrities’ NFTs are powerful enough to attract a wide range of investors. People are more interested in investing in an asset that is associated with a famous artist and that’s why such platforms are being preferred in today’s time.
