Do you know anyone who has purchased NFT artworks for millions or perhaps tens of millions of dollars?
If you’ve been keeping up with crypto news at all in 2021, you probably have. It is difficult to understand why someone would spend millions of dollars on what is essentially a JPEG.
We don’t have access to anyone who paid so much for an NFT artwork, but we have a good idea of why someone would do so. This is influenced by a number of things. Some of the justifications will be presented in this blog.
NFTs do really sell for enormous sums of money. CryptoPunks, the most expensive NFT art collection, with a floor price of $314,000 (USD). Sales of NFT for CryptoPunks have reached $7.8 million.
Such a high base value is typical of NFT collections in general, not just CryptoPunks. The Bored Ape Yacht Club NFT collection has a floor price of 51 ETH ($220,000). The highest price paid for Bored Ape NFTs was $2.3 million.
A Beeple (Mike Winkelmann) NFT collection recently sold for $69 million to Christie’s auction house. Currently, Beeple is among the NFT artists with the most popularity. He also holds the distinction of being the most expensive living artist.
These are merely a small number of the many applications for NFT. With NFTs that are practically as valuable as these, the Ethereum and Solana blockchains are complete.
To obtain NFTs, people do certainly pay a high price. Nobody disputes this fact, thus you can verify it by looking at the blockchain.
Why is NFT art so pricey?
Depending on their circumstances, people’s reasons for investing a significant amount of money on NFT art can differ greatly. Most justifications for purchasing NFT art should be covered in the reasons listed below.
People who are familiar with traditional art will notice that the same factors that drive up prices for conventional and NFT art are also driving up prices for NFT art.
NFTs tend to go up in value
The most common explanation for why NFT artwork is so pricey is also the simplest.
Forecasts indicate that the market value of NFT artwork will rise. This can be seen as an infinite loop. If someone offers $100,000 for an NFT, its value will increase. As a result, the value of the other NFTs in the set also increases. This concept can be used in any kind of NFT artwork.
Even more so, NFTs have a place in blockchain history. Due to its status as one of the first NFT collections, holding a CryptoPunk is like possessing a piece of Ethereum’s history.
Experts believe Ethereum can transform the global economy, despite the fact that it may not look like much right now. Those NFTs could end up being quite valuable in the long run. With the advent of hyper-realistic virtual reality on the blockchain, these digital images may appear even more authentic.
Lastly, some people pay too much for NFTs because they anticipate an increase in their value. However, this is not always the case, since many individuals are willing to pay a high price for classical works of art.
They can be used as profile pic
NFTs have another advantage over conventional artwork in that they can be used to make eye-catching profile pictures. Influencers in the crypto world can often be spotted using the CryptoPunk or Bored Ape avatar style on popular social media platforms like Discord, Telegram, and Twitter.
The owner employs a large number of people as a sign to the community. Imagine owning a Lamborghini or Ferrari of the internet world. On the other hand, those who have very valuable profile pictures on NFT may wish to keep their identities hidden.
The number of crypto investors who choose to keep a low profile in public while flaunting their wealth online is growing. This is a much safer option because they won’t attract as much scrutiny.
Formerly known as Facebook, the company has rebranded as Meta and is actively expanding its workforce throughout Europe. While there is no universal agreement on what the “metaverse” actually is, many people assume it to be a 3D virtual world where people may meet, socialize, attend events, and play games with one another.
Some NFT initiatives in the metaverse are already creating 3D avatars for its users. We may identify ourselves in 3D virtual worlds like Decentraland, Sandbox, and CryptoVoxels using the same 2D avatars we use on Twitter and Discord.
Chance to show wealth
Wealth creation in the cryptocurrency industry has been phenomenal. It is predicted that there are 100,000 crypto millionaires and 10,000 crypto decamillionaires (worth more than $10 million). Those numbers don’t impress us very much, but that’s beside the point. The most important fact to keep in mind is that these crypto billionaires probably went from having a 9 to 5 job to being millions in a matter of days or weeks.
The majority of billionaires in the IT sector are private about their wealth. Those who work in the IT field and can afford luxury items like designer clothes or expensive cars often face ridicule from their peers. Think about the accomplishments of Mark Zuckerberg or Bill Gates. Regardless, NFTs give these people a stage upon which to exhibit their progress to the rest of their industry.
Those who have so much disposable income have effectively created a new way to show off their wealth by buying certain NFTs.
That’s why a lot of people are willing to pay exorbitant prices for NFT art. Finally, it all comes down to getting a good bargain and being able to talk about it.