Is the NFT Market Dead?

Across my 40-ish year career in investing, one fact is obvious: Whenever an asset is declared dead, that’s always the best time to buy.

As Mark Twain once quipped: “The reports of my death are greatly exaggerated,” and, as I’ve seen, that absolutely applies to pretty much any asset class you can think of.

Right now, it applies particularly to the crypto market, and especially to non-fungible tokens, or NFTs—those one-off, one-of-a-kind cryptocurrencies I write about all the time and which represent everything from digital art to ownership in a business.

Amid a painful downturn in crypto over the last number of months, I’ve spied various headlines in which “NFTs” and “dead” are conjoined.

But I know a little secret.

Those headlines writers are wrong.

NFTs and crypto are alive and kicking. I’ve seen it with my own eyes.

In the past couple of weeks, two events happened that confirm the cryptoconomy still has a healthy pulse.

First, I was offered a job as CEO of the NFT division for a European blockchain. I may take that part-time position since it will allow me to continue in my role here as well (and gain access to even more insider info on the industry to share with you). That blockchain company is looking past this moment in crypto to see where the NFT space is headed, and the executive team realizes NFTs are a big part of society’s future.

And second, there’s the “ABC” effect.

ABC is a recently released NFT project also known as Abracadabra. The art is purposefully childish. Have a look at one of the three I own—a relatively rare mermaid version:

Behind the project is a crypto personality known only as “HGE,” the first three letters of his Solana-based Phantom crypto wallet.

HGE is a legendary “whale,” an ultra-wealthy investor whose crypto wallet holds literally millions of dollars’ worth of NFTs in some of the biggest projects around.

He launched ABC, in his words, “to recapture the joys of childhood.” And while this is true, the project also aims to be a canvas upon which others can build. One of the first projects being built is a new take on how NFTs are traded. I won’t dive into the techy details of that because it’s sort of not relevant to this dispatch.

What’s relevant is ABC itself, because the project has captured the attention of the NFT community.

ABC NFTs launched a couple of weeks ago for 1.23 Solana, or about $37. As I write this, they are selling at a minimum in the mid-20s, or about $775. My mermaid above has a floor price of 33, or more than $1,000…a nearly 28x increase in two weeks or so.

Which circles back around to my initial point: NFTs are not dead.

They’ve simply shifted focus.

Back during the bull market’s heady days, just about any project could mint a collection of NFTs and sell out. (“Minting” is the launch of a new NFT project, sort of like an initial public offering, or IPO, in the stock world.) Many projects would see their price move up quickly for no apparent reason other than over-eager FOMO, or Fear Of Missing Out.

The bear market mauled that thinking.

Today, many projects struggle to sell out during their mint. Lots of them see their price slide lower in the secondary market. I mean, I cannot tell you how many new NFT launches I have ignored this summer, many of them wrapped in a certain degree of hype.

But that doesn’t mean the NFT market is dead. It just means that NFT investors are looking for truly valuable and viable projects where they feel more secure sticking their money.

ABC is one of those projects.

Others exist, though they exist in smaller numbers these days (and I will tell you about one soon).

Nevertheless, the success of ABC tells me that, far from dying, the NFT space is maturing a bit. It’s moving past the frothy, “mint anything” mentality and is increasingly focused on quality.

All of which is my way of getting to the big takeaway: The NFT market is telling us that now is the time to be greedy.

Quality new projects are winning the day when it comes to minting, and quality existing projects are holding their own in the secondary market.

People are going to look back at this moment in the not-too-distant future and say, “I wish I’d bought when reports of the NFT market’s death were greatly exaggerated.”