2022 has been a wild ride, to say the least.
With the NFT market declining 97% according to Dune Analytics, and Bitcoin losing 63% of its value, it’s easy to see why some folks are feeling a little jaded. But, as they say, “every cloud has a silver lining.” In my opinion, the NFT market is poised for a comeback in 2023, and I’m here to spread some hopeium.
Let’s start with the numbers. At its peak, NFT collectible creator RTFKT was generating $3 million in NFT sales in just 6 minutes! That kind of success caught the attention of Nike, who acquired the company in 2021. Unfortunately, the NFT market started its downward spiral in May of 2022, causing even celebrities to take a hit. Justin Bieber spent $1.3 million on the Bored Ape #3001 collection in January, which is now valued at $95,000 – a 93% decrease.
So, why did the NFT market crash? In a nutshell, a lot of NFTs had no utility value. Once the early adopters pulled their investments, the market took a nosedive, forcing consumers and brands to reassess the market opportunity. But, this jaded outlook could lead to smarter investments, which could reignite consumers’ imaginations and create new value.
Fast forward to 2023, and we’re already seeing NFTs making a comeback. Brands like AMC and The History Channel are developing NFTs that offer more than just content assets. Purchasing an NFT from these brands gives owners increased status, brand influence, and a voice in future show storylines. Additionally, owners are invited to participate in online communities and events, giving brands the opportunity to learn from their biggest fans.
One of the most exciting opportunities for NFTs is the potential for real revenue. Brands can create merchandise, limited edition collectibles, and even charitable giving, all of which can be built into NFT sales. The concept of “twinning” is also gaining momentum, with brands organically creating virtual twins of their offline products or vice versa. NFTs provide a unique opportunity for customer participation and engagement in the metaverse, acting as VIP tickets and providing utility within virtual worlds.
And let’s not forget about Web3, the underlying infrastructure that plays a critical role in the evolution of NFTs and other Web3 technologies. Web3 provides three main areas of opportunity: extended reality, investing, and omnichannel extension. Brands can engage consumers in the phygital world, tokenize hybrid collectibles, and extend omnichannel marketing to reach customers on NFTs, the metaverse, augmented reality, and gaming platforms.
The NFT market may have taken a beating in 2022, but it’s far from down for the count. Brands and consumers alike are learning from their past mistakes and are taking a more thoughtful approach to NFT investments. With new releases, revenue potential, and exciting opportunities in the metaverse and Web3, I’m confident that 2023 will be the year of NFTs.