Can NFTs lead a crypto recovery? It’s a little early to make such a claim, not least because many crypto participants remain convinced that the crash is not yet over and recovery remains distant.
Whether or not such readings are correct will become apparent over the coming weeks and months, but it’s noteworthy that NFT markets have seen a healthy-looking recovery over the past week, considering the general state of crypto (as in a smoldering wreckage).
This comes after an FTX-triggered dip, but the subsequent recovery has been swift and includes increased floor prices and sales volumes. This uptick is pronounced across the top ten NFT projects, taking in established, top-tier collections (such as the Yuga Labs stable) but also some newer projects.
Utility Not Needed
One reason NFTs may perform differently from the rest of the crypto is the question of utility, or, more accurately, a lack of utility. Regarding regular cryptocurrencies, it’s fair to ask, when assessing value, what utility they provide, and who will take advantage of it.
When it comes to NFTs, though, these questions take on other angles. There are certain collections in which it’s perfectly reasonable for the tokens to have zero utility, or for the utility to be a secondary concern.
In these cases, NFTs can be thought of more like works of art, or other rare artifacts that are desired by collectors who have deep pockets. These items have value simply for what they are, and sometimes due to historical significance relating to both art and technology.
Some examples would be CryptoPunks (which didn’t have to recover from recent, FTX-related market impacts, because they remained unscathed throughout), and some Art Blocks collections, such as Fidenza and Ringers. In the art category, we can find a few newer collections going up in price, with an example being Fontana, by Harvey Rayner, which is also part of the Art Blocks platform.
Or Utility Defined
On the other hand, there are NFTs which clearly are intended to have defined utility, and there are those that fall somewhere in between.
Bored Ape Yacht Club is perhaps the most well-known example of the latter. They have value simply as a prestige digital collectible (as in, not for any inherent utility), but at the same time, they function as…
