What Happened To the NFT Craze?
It’s been a minute since the non-fungible token (NFT) craze took the Internet by storm. And it wasn’t too long ago that brands were minting NFTs, partnering with influencers and celebrities, and devoting substantial time and effort to developing digital goods.
But since this first emergence, other strategies and topics have had their moment to shine. Were NFTs just a phase, or are they here to stay? Let’s dig in.
The State of NFTs
Even though NFTs have been around since 2013-14, it wasn’t until 2021 that they exploded as a tradeable, monetizable asset. Though their momentum has started to slow as 2022 progresses, it seemed like every brand was trying their hand at either minting their own NFT or partnering with influencers to make one.
And most of us will remember how this innovation made its way through advertising mediums. Readers may recall how NFTs took over Super Bowl LVI advertising. Bud Light Next and Kia launched NFTs after the game’s conclusion, and the NFL even launched its own NFT marketplace.
But that was February, so what about now? According to Bloomberg, sales have dropped substantially in recent months. OpenSea, the largest NFT marketplace in the world, is reporting that sales have fallen a whopping 75% since May 2022.
Crypto Winter Is Coming
NFT decline is likely due to several factors, one of them being a cryptocurrency slump. Since NFTs are minted on the Ethereum Network, this poses an issue (btw: individuals can use the Ethereum [Network] to create their own cryptocurrencies).
Additionally, the NFT market is saturated with goods – and the demand is no longer meeting the supply. There’s also no longer a perceived scarcity, meaning that the rush to scoop up the best and most valuable NFTs is long over.
Still, based on a Mavrck survey collecting insights from 486 creators, 80% of respondents said that they would be interested in experimenting with NFTs. Of those, only 25% had already produced NFT-related content.
It seems that creators are still open to partnering with brands on NFT-related initiatives (or at least showed interest only four months ago). But with the continuing decline of NFT value and impact, what is the best move for brands and their creator partners?
If NFTs are still something that your brand is passionate about and you have allocated funds to pursue this, here are a few things to keep in mind:
1. Your brand should fit naturally into the NFT space.
Consumers are notoriously wary of brands that are jumping on trends just to make a quick buck. While some brands jumped on NFTs at the right time, that first-mover advantage is no longer available.
So, when it comes to minting, trading, or collaborating with influencers, ask yourself if your brand and vertical are a natural fit.
Does the foray into NFTs feel authentic, or does it seem like you’re capitalizing on a trend too late? If you can’t tell, your consumers definitely will.
2. NFTs should have more value than bragging rights.
At the height of NFT popularity, digital art was going for millions of dollars and getting snapped up by the richest of the rich with little reward other than proof that they pulled it off.
But other brands have attached value to NFTs that transcend bragging rights. Coachella, for example, made an NFT available for purchase that has lifetime festival access attached to it. The NFL has debuted commemorative NFT ticket stubs (yes, you can use them to get into the game). And not to mention that Kings Of Leon became the first band to release a full album as an NFT.
It goes to show that in a world saturated with NFTs, adding value via experiences, special access, and more is a creative way to keep consumers interested.
3. NFTs should be just one of many Web3 tools.
The metaverse is a vast land of digital tools and technology. Thus, NFTs can play a role in larger metaverse initiatives – if one plans correctly.
One way to capitalize on the bigger picture is to pair NFTs with virtual reality (VR), alternate reality (AR), or mixed reality (MR). NFTs have the ability to take the form of VR content. Because of this, NFTs can be used to show ownership of assets in a VR world, and they can also unlock products or services in the metaverse.
The good news is that the market for VR, AR, and MR is looking promising. According to Statista, the market size could rise to over $250 billion by 2028. That’s certainly not something to ignore, especially if NFTs have the opportunity to play a role in this massive future growth.
The Thing About Trends
One thing to remember about trends is that they’re apt to come back around.
Consider collectibles like Pokemon cards and Beanie Babies. They had their heyday and then experienced a resurgence among the next generation – with a modern twist.
While NFTs are not in the same realm, there’s a lesson to be learned: don’t give up on NFTs just because the forecast doesn’t look appealing at this moment. You may even find that sticking with NFTs as part of metaverse initiatives gives you a leg up over the competition, and a deeper knowledge of blockchain technology to boot.
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