NFT stands for non-fungible tokens. It refers to an item or product that is not reproducible. The emergence of NFTs on the blockchain has revolutionized the crypto world. They are a certificate of proof that the virtual property you bought is the real thing and not a counterfeit. The value of NFT is determined by various factors highlighted in this article. Read on to understand the resale value of NFT and how it works.
What is NFT Aart?
“What is NFT Art?” is the question that has been on everyone’s lips for these past couple of years. No wonder everyone is talking about NFT art when they have made such a big splash in the tech and financial world!
NFT art is a unique digital asset one cannot recreate in the crypto world. Imagine the Monalisa painting put on the internet, and you are the sole owner of it. The ability of digital art to be limited is what makes it valuable.
The Value of NFT Art
Since it entered the market, the primary value of NFT art has been relatively high. This value is either market-driven, subjective, objective, or historical.
1. The Market-driven Value of the NFT Art
Market-driven value rests on the popularity of the artists. Anyone who buys art for the market-value hopes to resell it at a higher price, considering the appreciating nature of important works of art. Digital art such as NFTs sells for higher prices if they are by a renowned artist.
2. The Subject Value of the NFT Art
Subjective value comes into play when the origin of a piece of art is the condition under which it was created. The art may convey
- a political,
- social meaning.
One can buy art because of what it makes them think or how it makes them feel, and this reason falls under the subjective value category.
3. The Objective Value of the NFT Art
For NFTs, popularity is the objective value. This does not entirely diminish the value of the art, but it changes the concept of value. With physical art, objective values are the technical skills of the artist. However, with NFTs, it is difficult to determine the skill concept. Therefore, the change in skill concept does not mean that the objective value is lost; it only changes.
4. The Historical Value of the NFT Art
Limited edition arts and artwork by famous artists have historical value. Likewise, images and paintings of popular historical events have such value. NFTs have been around only for a few years and may not have any historical values just yet. However, an NFT artwork, like Everydays: The First 5000 Days, sold for sixty-nine million dollars, which is historic. This piece of art achieved all four significant values attributed to art, which more than legitimizes its standing as historical.
The Resale Value of NFT Art
The sustainability of art in the NFT world requires an appreciation of resale value. At the very least, the market should avoid depreciation in the value of art when reselling to avoid a crash. Most initial artworks sold for high value are not in the market for reselling. However, the few that have returned to the market have fetched higher secondary prices.
Unlike the physical world, however, the crypto world fluctuates. This uncertainty might eventually bring down the value of digital arts that first sold for millions of dollars. Nevertheless, NFT enthusiasts believe that the crypto world is here to stay, and hence, the value of items might eventually stabilize.
While a lot of people are still trying to grasp the concept of the crypto world, others have made millions of dollars. Whether this idea is here to stay or a passing wave, one can affirm that it has transformed the art world. This is a world for risk takers that live by the saying “go big or go home.”
Bottom Line: Do You Have a Reason to Buy an NFT?
One of the primary reasons you should consider buying an NFT is to support artists, especially those yet to make it in the art scene. It is hard to monetize digital art, but selling the image, song, video, or any other piece of work allows the artist to make money on a limited edition series. The resale value of an NFT art is designed by the seller and the market position at that moment. The value continues to rise due to demand, the rarity of the NFT, and the seller’s standing.