The space of non-fungible tokens or as popularly known as NFT is having its big-bang moment. It has seen a sporadic rise in 2021 alone, with the phenomenon attracting a newfangled brew of not just artists and collectors but also speculators looking to make a fortune off the latest fad.
Beyond the hype, it has emerged as a prominent space enabling talented artists to receive compensation in perpetuity for their works – thereby establishing more apparent parity. According to prominent venture capitalist and cryptocurrency veteran Spencer Noon, we are currently at the beginning of a legendary NFT bull market. His tweet about the same read,
“NFTs hit an inflection point with market structure and underlying infrastructure at almost the exact same time, transforming the category under the hood basically overnight [..] I now believe we’re seeing just the start of a legendary NFT bull market.
Noon also went on to add that,
“Market structure changes: funds, DAOs, non-crypto native UHNWs have entered the chat. Infrastructure changes: fractionalization, aggregation, capital formation. When you mix this [the above] with a market that is inherently super illiquid, you get fireworks.”
Parallels between NFTs and ICO Boom
Even as the NFT marketplace has exploded where individuals purchase unique virtual artwork on the blockchain and then trade it, many found it familiar with the ICO marketplace that saw similar enthusiasm a couple of years ago. A key appeal for non-fungible tokens has been the liquidity factor wherein people can trade these assets amongst each other. However, the million-dollar question that remains is – What’s the consequence of regulatory entities such as SEC looking into this?
Not long ago, Litecoin founder Charlie Lee had previously warned about the thriving sector and argued he sees many similarities between this year’s craze and earlier trends that have captured the crypto world in the form of ICO.
Firstly, the Litecoin exec had argued how easy it was to create new NFTs with few hurdles to entry. Tons of people flooding into NFTs further provided legitimacy to the space, which is fairly simple to understand and explain. He had also added that the hype and FOMO begin prices pump. However, he stated that only a handful of NFTs would hold and have value in the years to come, and most would not.