Investors and NFT experts explain what will happen in the future

NFTs or tokens Non-expendable became all the rage last year thanks to celebrities from Snoop Dogg to Reese Witherspoon sporting six-figure JPEGs as their profile pictures.

On the other hand, the work Everydays: The First 5,000 Days of Beeple sold for more than €68 million at Christie’s auction house. Dolce & Gabbana and the NBA were quick to jump on the bandwagon with their own collections.

However, as cryptocurrency markets fall, so do NFTs. Ethereum, which is commonly used to buy and mint digital assets, has fallen by 78.7% from its all-time high in November, according to Messari.

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Top-tier collections have also seen their value drop, according to an industry report from DappRadar. Bored Ape collection floor prices plunged 38% last month.

OpenSea, one of the largest NFT marketplaces, didecreased 65% in trading volumes and had a 14% decrease in the number of users during this same period.

However, some NFT and Web3 mutual fund founders have told Business Insider that, although the prices are falling, the tokenized assets will remain and will end up reaching the mainstream in 2032.

10-year outlook for NFTs

Benjamin Cohen, founder of crypto startup firm Web 3 Equities, says that most NFTs won’t just show up on collectors’ social media accounts as a way to show off their wealth.

Instead, they will have a wide variety of uses ranging from music, video games, ticket sales, and virtual real estate to house deeds, medical records, and even loan guarantees.

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As an example, it is enough to remember that the virtual real estate developer Republic Realm announced last year that it had bought a property in the metaverse game The Sandbox for 4.3 million dollars.

In March, an anonymous investor took out a loan from 8 million dollars backed by a collection of 101 CryptoPunk NFTs.

“Over time, entrepreneurs will find creative ways to use NFTs and smart contracts in ways we haven’t yet conceived of, far beyond the realm of status symbols,” Cohen predicts.

Although they founded different companies, the CEO of blockchain ticketing platform YellowHeart, Josh Katz, and Cohen agree that NFTs will become more and more useful.

People will cut out middlemen, Katz says. With a ticket in the form of an NFT, third parties like Ticketmaster can be dispensed with. YellowHeart, which has worked with musicians like Kings of Leon and Maroon 5, has announced a partnership with Tao Group Hospitality to sell tickets at their venues like NFT.

“Companies will find cool ways to incorporate NFTs into something we’re doing every day right now,” says Katz, adding that most projects will offer some kind of advantage that conventional technology doesn’t. “In the case of ticket sales, you could reduce the queue, get to the venue earlier or get a free beer.”

In 2032, NFTs will also will be more accessible that now so “most users” can afford them, says Stephen Young, founder and CEO of NFTfi’s lending marketplace.

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“At the moment, many NFTs are expensive because their blockchains are expensive and slow, so the uses that make sense require high-value NFTs,” he explains.

In order to mint or buy NFTs in Ethereum, investors and creators have to pay what are known as “gas fees”. These costs occur when performing any type of function on the ethereum network.

Sometimes these fees can be more expensive than the NFT itself. Other blockchains and layers like Solana or Polygon, however, have faster transaction times with lower costs.

Widespread adoption and obstacles

Andrew Steinwold, managing partner of NFT investment company Sfermion, says that video games will be the use case that incorporates the most users.

Sfermion, without going any further, announced a $100 million fund last year and has previously invested in the AI-powered NFT platform Alethea AI, as well as the developer platform Web3 Mojito and the virtual real estate market Parcel.

“I think NFTs in gaming have a very simple sales pitch to the user: ‘Hey, you spent $20 on this digital good in this game, but you don’t actually own it. Wouldn’t you like to own it?’ ?” says Steinwold.

Blockchain-based video games, unlike the broader cryptocurrency markets, have been flat in recent months.

Around 1.15 million daily active wallets interacted with Web3 games in May, according to a DappRadar report, which is a drop of just 5% compared to the previous month. Among the most popular games are splinterlands and rain.

Video games are also “fun and easy” to understand for people of all ages, Steinwold says, lowering the barrier to entry to enter their ecosystem.

Blockchain-based video games, or those that embed tokenized assets on-chain, grew 2,000% last year, according to a Q1 2022 report from DappRadar and the Blockchain Gaming Alliance.

With the massive growth of NFTs will also comeWho wants to take advantage of the systemwhich is a big problem for the general adoption of this instrument.

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Critics are wary of the ecosystem due to growing concerns surrounding issues like security, scams, and money laundering.

Earlier this month, Yuga Labs, creator of Bored Ape Yacht Club, said on their Discord that a hacker had stolen $360,000 in NFT. In January, the anonymous founders of a collection of NFTs called Frosties disappeared after siphoning off $1.3 million worth of funds from their investors.

“Money laundering, and in particular transfers from sanctioned cryptocurrency companies, pose a huge risk to building trust in NFTs. These should be watched more closely by markets, regulators and law enforcement,” he says. blockchain research firm Chainalysis in a recent report.

Love them or hate them, NFTs don’t look like they’re going away any time soon. Investment bank Jeffries forecasts massive percentage growth over the next five years, coupled with a market capitalization of more than $80 billion by 2025.