Author: Moritz, Crypto KOL
Compiled by: Felix, PANews
If you still hold NFT, you will lose a lot of money and everything will go back to zero. At a time when the NFT market is full of negative voices, this article discusses what the future of NFT will look like.
Key Points
NFT will not return to zero. NFT floor price will rise wildly again, but only for a few projects. Even early projects will be useless if the team does not execute well. New projects have advantages over old projects. We will see cheaper NFT+L2 applications.
You may have seen some tweets like this last week: the market is in a correction period, NFTs will not go to zero. But there are a lot of misunderstandings here, so let's talk about how the NFT market will develop in the next few years. Of course, it's just an educated guess, after all, no one can predict the future.
Remember when the floor prices of CloneX, Moonbirds, and Doodles NFTs were over $80,000, and the market sentiment was still FOMO? Now the floor prices of these NFTs are all below $5,000, and people are shouting that they will return to zero. It is important to understand the reasons for such a big difference in prices before and after.
First of all, the core of NFT is digital collections, some of which have practical value, but the main value comes from IP (+ community). Why can these NFTs sell for so much money? The number of really good projects is very limited. So the money in the market is concentrated on these top projects.
But now there are more and more good projects in the market, and in the next round of bull market, the number of good projects will only increase. The liquidity in the market will be dispersed to more projects. Therefore, for most projects, even if the overall funds in the market increase, the funds allocated to small projects will be much smaller.
In addition, the value of early projects is overestimated. Maybe you think CryptoPunks is not overestimated. Yes, CryptoPunks and some other NFTs are early NFT projects, and the market has given them value. Generally speaking, early projects can bring value, but Pixel Pigs, which is also an early pixel-style NFT, has not gained much market value.
So how will NFT develop in the future?
People always like to collect things and will always like to collect things in the future, and NFTs are not going away. The market is currently dominated by expensive NFTs, and this situation is likely to change in the future. Mass adoption may be achieved through cheaper NFTs. Reddit is a good example. This will also lead to L2 adoption of NFTs. After all, it doesn’t make much sense to buy a $50 NFT and pay $10 in gas fees (Reddit also chose to deploy on Polygon).
Even if most people will trade or collect cheaper NFTs, as more users enter the NFT space, the price of expensive NFTs will rise. Cars, watches, and almost all other collectibles have different price ranges, and so do NFTs.
What will the next NFT cycle look like?
The market will become smarter. We will see crazy rising floor prices again, maybe even higher than the last bull run. But not every project will be as crazy as the last round, and the winners of the next cycle will be different projects.
Which projects will be the winners?
At present, it doesn’t matter whether NFT has Web2 users, because these users will not spend $10,000 to buy a jpeg picture. But this situation will change in the future, and those projects that can successfully break out of the circle and make a name for themselves outside the Web3 field may become winners.
Many existing collectibles will face difficulties in the future because those who have not yet launched collectibles or tokens will launch new projects in the future. In addition, more Web2 giants will enter the NFT field in the future, and they can learn from all their past mistakes.