Last week, YouTube announced its interest in entering the NFT market. As stated by BTC-ECHO, the goal of the introduction should be to enable interested parties to “own” their videos. There is also news about the NFT market apart from the video platform. For example, Gustav Klimt’s painting “The Kiss” will be sold on Valentine’s Day as 10,000 non-exchangeable tokens. According to the Belvedere Museum in Vienna, he writes art history. And that, although it is not yet known how far the rush will be towards 1,850 euros of mosaic NFTs. However, the museum believes that a “personal connection to the masterpiece” can be established through the acquisition. Only future owners can judge whether this is indeed the case in the end. However, the truth is that more and more companies and individuals are entering the world of NFT.
NFT’s total market capitalization exceeds $16 billion
However, with Messari’s collapse last week, the art market is so far “only” the third largest NFT class by market capitalization. Nearly $2.3 billion could have flowed into these digital artworks thus far. According to the analysis firm, more investments were made in the gaming area NFT (second place with about 3.4 billion US dollars). However, digital avatars currently occupy the largest position in the total market capitalization of NFTs.
According to Messari, these avatars account for nearly half of the total market capitalization of NFTs. Among other things, they serve the owners as digital identities in the metaverse.
In the past few weeks alone, many famous personalities such as Heidi Klum or Neymar Jr. have outfitted themselves with NFT devices like those at Bored Ape Yacht Club (BAYC). In the eyes of many cryptocurrency enthusiasts, these little monkeys are much more than digitally generated images. More on this in the next post:
NFT culture meme
Critical comments of NFT “antagonists” are often backed by memes. Because for many people it is incomprehensible how millions can be paid for NFTs. In particular, because you still can’t protect them from possible replication attempts. El Hotzo, the satirist, appears to be sharing this criticism, as his Twitter post suggests.
Internet expert and author Tim O’Reilly also sees a bubble in NFTs. In an interview with CBS Money Control “I think it’s really a serious bubble with a little foundation,” he says.
So far, NFTs are certainly developing an ever-widening foundation for individual buyers. The number has been growing steadily since January 2021.
SEC belongs to the critics group
Besides a few individuals, the US Securities and Exchange Commission (SEC), the US securities regulator, is among the critics of NFTs, particularly in the art world. She wrote in her own report, among others:
The ability to conduct cross-border NFTs online, regardless of geographic distance and almost instantly, makes digital art vulnerable to exploitation by those trying to launder the proceeds of illicit crime. This is because the movement of value can be realized without the potential financial, regulatory, or investigational costs of physical shipping.
The Supreme Education Council, Study on Facilitating Money Laundering and the Financing of Terrorism through Trade in Technical Works, 4 February 2022
However, it should be noted that buying paintings at exorbitant prices is a well-known phenomenon in the art world to launder money or avoid paying taxes. Then it is often stored in so-called “free ports” (large halls in the transit area of airports). The authorities do not have access to this either. However, with NFTs, the authorities at least have the opportunity to trace the exact history of transactions with their owners via blockchain technology. Shouldn’t that make your job easier?
Sorare: Collect digital football cards on the blockchain
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