The world of NFTs, once at the center of a cultural and financial frenzy, has seen its momentum wane. Despite the downturn, many artists and collectors remain optimistic about the possibilities these digital assets hold for the future of art and commerce.
“It was a mania,” reflected Noah Davis, former head of digital art at Christie’s in Manhattan. “But manias are fun.” Davis was instrumental in the record-breaking 2021 sale of Mike Winkelmann’s (known as Beeple) digital artwork, Everydays: The First 5000 Days. The piece, auctioned as a nonfungible token (NFT), sold for $69.3 million in ether.
The hype surrounding NFTs attracted droves of buyers, especially younger demographics, eager to invest in collections like Bored Ape Yacht Club and Pudgy Penguins. These digital collectibles were heralded as both status symbols and investments, with some trading for millions of dollars on platforms like OpenSea. Enthusiasts even bid on NFTs tied to unconventional items, such as NBA video highlights or a New York Times column about NFTs.
The cultural significance of NFTs reached mainstream media, with celebrities like Jimmy Fallon and Paris Hilton flaunting their Bored Apes on The Tonight Show. At the height of the craze, Yuga Labs, creators of the Bored Ape characters, was valued at $4 billion—on par with Disney’s purchase of Lucasfilm.
Yet, the NFT boom was inextricably tied to the rise of cryptocurrency values. While cryptocurrencies have rebounded after a slump, NFT prices have struggled to regain their highs. By April 2024, the floor price for Bored Apes had dropped 90% from its peak, with Mutant Apes selling for as little as $12,800.
“The space is so dead,” declared Zeke Faux, author of Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall. Faux attributed the decline to speculative buying rather than genuine enthusiasm for the art form. “If the core appeal is getting rich, when you stop getting rich, you lose interest,” he said.
Even Yuga Labs has faced challenges, announcing layoffs in 2023 and pivoting toward the metaverse with a game called Otherside. Many other NFT ventures that flourished during the boom have similarly struggled to sustain their initial success.
However, some pockets of the NFT world remain resilient. Pudgy Penguins have maintained value, with plush toy merchandise generating millions in sales, while the Doodles collection has expanded into fashion and music. Sotheby’s also set a record for algorithm-generated art in 2023, selling Dmitri Cherniak’s Goose for $6.2 million.
Noah Davis, now a founder of Fountain, a brokerage for digital art, sees a silver lining. “All that speculative, explosive energy is now gone,” he said. “If NFTs catch on in their purest form, artists will have more freedom to transact, and the financial industry will be transformed.”
For those still invested in the NFT ecosystem, the gamble is not over—just reshaped.
