The NFT market, once flush with big-money deals, has lost its lustre. While some people made “life-changing money” at the peak of its hype in 2021, others saw their tokens lose almost all value. But it may not be all gloom – Non Fungible Tokens, once only traded as collectibles of unique items like art, music, sporting memorabilia could evolve and find practical applications.
In 2021, alongside international stars, Indian celebrities also jumped on the NFT bandwagon. Amitabh Bachchan released Madhushala, his father’s poetry recitation, as part of an NFT collection featuring autographed Sholay posters and other movie memorabilia, which was auctioned for ₹7.18 crore on an NFT marketplace. Salman Khan’s Dabangg NFT collection and Rajinikanth’s ‘Shivaji The Boss’ collection were sell outs.
“Unlike cryptocurrencies like Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, NFTs are indivisible and distinct,” says Aishwary Gupta, Global Head of Payments at Polygon Labs.
These tokens created new opportunities for artists and creators and enjoyed a bull run in 2021. One of the most expensive NFTs was a collage of around 5,000 images called Everydays: The First 5000 Days by Beeple, which sold for $69.3 million.
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However, as the hype faded, netizens came forth with accounts of financial losses. According to a 2023 dappGambl report, among the 69,795 collections it studied, most had a market cap of close to zero Ether. “This statistic means that 95 per cent — over 23 million people — holding NFT collections are holding onto worthless investments,” said the report.
The NFT market, which had a cap of around $500 billion in April 2022, dropped to $14.3 billion today according to CoinMarketCap, representing a decline of 97.14 percent.
Evolution and comeback
“It’s not all doom and gloom. Pudgy Penguins, once considered just another hyped collection, made an epic comeback after securing licensing deals with major retailers. Now, these NFTs have real-world value beyond speculation, proving that projects with strong fundamentals can survive market downturns,” says Sathvik Vishwanath, Co-founder and CEO of Unocoin.
Polygon Labs’ Aishwary notes that the underlying technology continues to evolve. With speculative projects faded, NFTs are now finding more practical applications beyond collectibles. For example, Nike’s SWOOSH platform allows sneakerheads to own digital collectibles tied to real-world products.
Industries like gaming, fashion, ticketing, and real estate are integrating NFTs to enhance digital ownership and interoperability. Additionally, enterprises and institutions are exploring them for identity verification, IP rights, and digital twins in supply chains.
