NFT ‘hype cycle’ over, major changes expected in 2023: report

New York-based technology consulting firm Activate Consulting has projected that 2023 will see “the end of NFTs hype cycle” with the token class expected to undergo major changes in how they are used and regarded.

See related articles: Singapore court issues ‘huge’ NFT decision, allows papers to be served via blockchain

Fast facts

• “NFT hype is over,” declared Activate’s report, revealing that the token class recorded just US$1.1 billion in sales for August 2022, a year after sales peaked at US$6.2 billion in August 2021.

• Activate believes this downturn will force NFTs to adopt “more tangible use cases rooted in established technology and media behaviors,” such as e-commerce and social media.

• Activate expects that the bulk of these new NFT uses will target problems the technology has a “strong rationale for solving,” including community building, rewarding customer loyalty, and legal automation for content, digital real estate and digital collectables.

• They also report a decisive change in user rationale for purchasing NFTs, the token class decreasingly regarded as an investment and increasingly as a collectible for display.

• Activate also revealed that “less than one third of U.S. adults are aware of what an NFT is.”

See related articles: Ethereum’s LooksRare latest NFT marketplace to make creator royalties optional