Many newbies come to cryptocurrencies on the back of the crypto hype. In 2017 it was the ICO hype, in 2020 it was the DeFi hype, in 2021 it was the NFT hype. But in the crypto industry, as a rule, where there is hype, there is most of the scam, because scammers do not miss the opportunity to capitalize on human greed and inexperience.
I think it's obvious to most experienced crypto users that most NFTs are junk with no value, with a few exceptions (like CryptoKitties and CryptoPunks that existed before the NFT hype). But newcomers run to the market to buy various cheap NFT shit, hoping that in a month, a year or more, their token will cost 100-1000 ETH.
We observed something similar with ICO coins, when people invested in everything, thinking that these projects would bring them x100-x1000 profits, but only the creators of these tokens, and not investors, are guaranteed to earn in these HYIPs.
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The most popular NFT exchange, OpenSea, has quickly become a major platform with billions in trading volumes in the summer of 2021:
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And six months later, OpenSea itself admitted that 80% of the garbage was placed on their platform:
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And 73% of the NFTs placed on their platform are illiquid and have only 1 transaction (which, with a high probability, may be part of wash trading):
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In fact, those who create these tokens very often buy them from themselves (wash trading), thereby artificially increasing the price and, in the eyes of a beginner, this garbage token acquires value. The beginner thinks that if the token is bought so often, it means that it will continue to be in demand, and therefore, grow in price. Only one nuance is not taken into account: when the NFT hype passes completely, 99% of these tokens will die forever and remain dead weight on the wallets of these unfortunate investors (hello, ICO coins).
Therefore, you should not invest your money in this garbage, hoping for an easy and quick profit. In this scheme, most often, the one who sells earns, and not the one who buys. NFT tokens, more or less known, can be used for short-term speculation, while it is still relevant, but still, this activity is very risky and dangerous.
Therefore, avoid such investments and invest your money deliberately, and not on a wave of euphoria.
This usually happens with every emerging trend. Just like there were garbage ICOs, the same is happening with NFTs now. Only those NFTs with intrinsic value will survive in the long run, while the rest go all the way down the drain. Picking the right NFT as a long-term investment is tricky, since you can't predict whenever an NFT will become a huge success or failure in the mainstream world. Crypto land often behaves in strange and bizarre ways, so expect the unexpected.
What I think will really take off is not digital arts/paintings, but rather in-game items as NFTs. That's where the money will be since games are a big hit these days. It's still the early days of NFTs, so I'd say we should give them more time until they're mature enough for mainstream use. Just my thoughts
