NFTs (Non-fungible tokens) seem to be the next hot topic in crypto, and while their numbers are still relatively small, engagement and interest seem to be growing rapidly. This suggests that this sector has a lot of room for growth.
NFTs are a distinct class of cryptocurrency tokens. Unlike Bitcoin (BTC), they are used to represent different types of assets that differ in value from one another. These assets can be digital or physical. Popular examples include art, land or real estate, and even people.
For instance, an artist known as Beeple created an NFT called “Crossroads.” a Trump-inspired piece of art, which was originally sold for $66,666 back in November 2020. However, it was recently resold to an anonymous buyer for $6.6 million, breaking the previous record of $1.5 million for a single NFT sale.
According to Messari, the top 10 digital tokens that are associated with NFT platforms have returned in a year-to-date price range from about 60% to 900%. This is reflected in their price gains on a daily and weekly basis.
On a 7 day basis, Enjin Coin (ENJ) is up 98.93% while Chilliz (CHZ) and Flow (FLOW) are up by 112.70% and 62.50% respectively. During the week, Theta (THETA), Enjin Coin, and FLOW rallied to new all-time highs. On March. 6, Audius (AUDIO) attained a new all-new all-time high of $1.23. AUDIO is up by nearly 50% in the last 24 hours and 113% on a 7-day basis.
Non-Fungible Yearn (NFY), a DeFi platform whose goal is to utilize the full potential of Non-Fungible Tokens (NFTs) in the DeFi sector is up by 5366.50% on a 7-day basis.
The prices associated with “non-fungible tokens,” or NFTs, might not be affordable or seem ludicrous to the average person. However, rather than buying NFTs directly, investors and traders are buying NFTs related tokens such as Audius (AUDIO), NFTX, FLOW to gain exposure to NFTs. Therefore they can bet NFT industry’s growth this way.
Mason Nystrom, research analyst at Messari, “Since NFTs are going through a hype cycle, that naturally raises the price of assets similarly associated with NFTs,”
Recently, some 10,631 packs of basketball videos hashed to the Flow blockchain sold for a record $1.05 million, sending the FLOW token to all-time highs. The FLOW blockchain powers the digital collectibles platform NBA top shot.
Enjin Coin (ENJ) is also recording enormous growth after revealing its intention of rolling out two new product offerings focused on NFTs. Audius price also hit a new all-time high after the decentralized music streaming platform surpassed 3 million active users and developers hinted at future NFT integrations.
Despite the enormous growth and potential showcased by these NFTs tokens, some analysts are calling for a tinge of caution. They cautioned that with the skyrocketing increase of many of these tokens, the pressure of any near-term sell-off is also high. Mason Nystrom stated as regards FLOW token which presently has a low circulating supply of 23,301,002 FLOW:
“We’ll likely see some short-term sell-off once tokens start vesting especially considering both institutional and retail investors are up many multiples since they had really low initial purchase prices -$0.1 per Flow”
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