Many are pushing non-fungible tokens (NFTs) as the next big thing in cryptocurrency. While market uncertainty continues to reigns, in particular DeFi markets, which have failed to recapture the levels seen before the recent slump, now is as good a time as any to make a mark.
Certainly, Bitcoin bull Anthony Pompliano believes this to be the case. Recently, he announced his interest in NFTs in the form of digital art. He believes blockchain technology has the potential to disrupt the traditional art world.
What’s more, with an estimated market cap of $65 billion, the upside potential for digital art as NFTs is massive.
“This transition to a digital art world is not a question of if it will happen, but rather when. In fact, I personally believe that the digital art market cap will grow to become larger than the physical art market cap.”
Are NFTs a Fad That Has Already Come and Gone?
However, not everyone agrees with the thesis that NFTs make appropriate investment vehicles. The primary argument against is the ease with which tokenized collectibles and art can be copied.
Nonetheless, hoping to seize the moment, once popular NFT platform CryptoKitties is looking to revive interest by tweaking its offering.
However, crypto researcher Larry Cermak pointed out that the only change he’s noticed is a difference in scarcity. Even so, he remains unconvinced that the speculation aspect of NFTs, in general, is sufficient to justify the hype.
“The only thing that’s different is that scarcity seems to be more refined in the new versions. But I still don’t quite understand why people want to hold these other than for speculation. That doesn’t tend to last.”
Cermak charted data on CryptoKitties users. It showed that Autumn 2017 was the peak period with just short of 15,000 users. But by January 2018 the number of users declined sharply. To this day, CryptoKitties has not recaptured the same level of interest as seen during its peak.
Similarly, as expected, the pattern is repeated in the volume generated by CryptoKitties. Again, Autumn 2017 saw its peak volume at approximately $8 million. But currently, the trading volume is negligible and has been for more than two years.
CryptoKitties Is Unrepresentative of All NFTs
All the same, one Twitter user points out that gaming mechanics count for a lot, and that limited gameplay on CryptoKitties hinders it from appealing to dedicated gamers.
As such, using CryptoKitties as an NFT case study makes for a one-sided argument.
With that, Minecraft, in conjunction with ENJIN, recently announced that they are in the process of developing an NFT marketplace.
According to statista.com, there are 126 million active Minecraft players worldwide, and this is a figure that has seen year on year growth since 2016.
Active Minecraft players worldwide. (Source: statista.com)
So, despite CryptoKitties fading, can Minecraft, with help from ENJIN, take NFTs mainstream?
ENJ daily chart YTD with volume. (Source: tradingview.com)