Last week, YouTube announced its interest in entering the NFT market. The aim of the introduction should be that interested parties can “own” their own videos. There is also news on the NFT market apart from the video platform. The fact is, however, that more and more companies and individuals are entering the NFT cosmos.
The NFT total market cap is over $16 billion
However, as Messari broke down last week, so far the art market is “only” the third largest NFT category by market cap. A total of almost 2.3 billion US dollars would have flowed into these digital works of art so far. According to the analysis company, more investments were made in the gaming NFT area (second place with around 3.4 billion US dollars). However, digital avatars currently hold the largest position in the total market capitalization of NFTs.
According to Messari, these avatars account for almost half of the total market capitalization of NFTs. Among other things, they serve the owners as digital identities in the metaverse.
1/ According to NFT analytics platform @nftgoio the NFT market capitalization exceeds 16 billion or around 1% of crypto’s two trillion dollar industry.
— Messari (@MessariCrypto) February 10, 2022
Avatar NFTs currently represent the largest sub-sector within NFTs. pic.twitter.com/NReSHCcyv0
In the past few weeks alone, many famous personalities such as Heidi Klum or Neymar Jr. have equipped themselves with NFTs such as those of the Bored Ape Yacht Club (BAYC). In the eyes of many crypto fans, these little monkeys are far more than just digitally created images.
NFT meme culture
The critical comments of the NFT “opponents” are often backed up with memes. Because for many people it is incomprehensible how millions can be paid for NFTs. In particular, because you still cannot protect them from possible replication attempts. El Hotzo, the satirist, seems to share this criticism, as his Twitter post suggests.
Tim O’Reilly, Internet guru and author, also currently sees a bubble in the NFTs. In an interview with CBS Money Watch he says, “I think it’s really a serious bubble with little foundation.”
So far, NFTs are definitely developing an ever-widening foundation of individual buyers. The number has been growing steadily since January 2021.
SEC belongs to the group of critics
Along with a few individuals, the American securities regulator, the Securities and Exchange Commission (SEC), is among the critics of NFTs, particularly in the art world. In one of your own report writes, among other things:
The ability to conduct NFTs across borders over the internet, regardless of geographic distance and almost instantaneously, makes digital art vulnerable to exploitation by those attempting to launder illegal criminal proceeds. This is because the movement of value can be accomplished without the potential financial, regulatory, or investigative costs of physical shipment.
SEC, Study of the Facilitation of Money Laundering and Terror Finance Through the Trade in Works of Art, February 4, 2022
However, it should be noted that it is a well-known phenomenon in the art world to buy paintings at high prices in order to launder money or avoid paying taxes. These are then often stored in so-called “free ports” (large halls in the transit area of airports). Authorities have no access to this either. With NFTs, however, the authorities at least have the opportunity to track the exact history of transactions with their owners via blockchain technology. Shouldn’t that actually make your job easier?
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