The NFT Space Won’t Grow If We Continue to Cater to Speculators

In order for the Non-Fungible Token (NFT) space to thrive and grow sustainably, it is crucial to shift our focus away from solely catering to speculators. While speculators play a role in driving demand for NFTs, a healthy and diverse ecosystem requires a broader audience and use cases. By encouraging artistic expression, fostering community, and exploring new applications for NFT technology, we can create a more inclusive and dynamic NFT space that benefits all stakeholders. Ultimately, this will help to ensure the long-term growth and success of the NFT industry.

NFTs: Moving Beyond Speculation and Towards Luxury Goods

The world of NFTs has transformed dramatically since I first got involved in 2018. At the time, it felt like a distinct industry within the crypto world, one that provided a real use case and not just a tool for speculation. However, fast forward to today, and NFTs have merged with the rest of the crypto space, becoming just another thing for crypto speculators to bet on.

Unfortunately, the majority of participants in the NFT collectibles and art space are speculators. While there’s nothing inherently wrong with speculation, it’s preventing the NFT market from capturing the much larger opportunity of the luxury goods sector. By focusing on speculative assets, NFT creators, marketplaces, and investors are creating products that appeal only to speculators and keep away the potential customers most important for the future of NFTs.

The problem isn’t just limited to NFTs either; collectibles as an asset class have historically struggled compared to other opportunities. The most significant barriers include a lack of liquidity, an unregulated market, the market’s inaccessibility, and the fact that collectibles are tricky assets to invest in.

One challenge that arises when investing in collectibles is the paradox at the heart of investing in them: the value of a collectible comes from the emotional attachment that the collectors have for it rather than any underlying fundamentals. This makes it challenging to invest comprehensively because investors can’t be emotionally attached to an investment if they have a fiduciary duty to view it solely as an investment.

To address this issue, NFT creators should focus on the luxury goods customer type, which is quite different from a speculator customer type. Luxury good customers buy things primarily to signal to others their sophistication and cultural knowledge, often having their financial needs already met. They use the objects they purchase as a way of subtly showing that to the world.

The potential for NFTs is significant, but the market must focus on luxury goods instead of speculative assets. Doing so could attract a new class of customers and expand the NFT market beyond its current local maximum.

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