Why Do People Spend Such A Large Amounts On NFT Art?
Do you know anyone who has purchased NFT paintings for millions or perhaps tens of millions?
If you’ve been keeping up with bitcoin news at all in 2021, you probably have. But why someone would spend millions of dollars on what is essentially a JPEG. We don’t have access to anyone who paid so much for an NFT art, but we have a good idea of why someone would do so. A number of things influence this. Some of the justifications will be presented on this blog.
Millions spent on NFTs?
NFTs do really sell for enormous sums of money. CryptoPunks, the most expensive NFT art collection, has a floor price of $314,000 (USD). Sales of NFT for CryptoPunks have reached $7.8 million. Other than CryptoPunks, NFT collections also have a high floor price. The highest price paid for Bored Ape NFTs was $2.3 million. The Bored Ape Yacht Club NFT collection has a floor price of 51 ETH ($220,000).
Over the past week, #NFT sales hit $335 million.🚀
Here are the top 3🔥
1 – CryptoPunks, 7-Day Sales Volume: $37 million
2 – Bored Ape Yacht Club, 7-Day Sales Volume: $36.3 million
3 – The Sandbox: 7-Day Sales Volume: $7.8 million
— CRYPTOPULSE💥📻 (@crypto_pulse) February 23, 2022
A Beeple (Mike Winkelmann) NFT collection recently sold for $69 million to Christie’s auction house. One of the most well-known NFT musicians at the moment is Beeple. He also holds the distinction of being the most expensive living artist.
NFTs that are full on the Ethereum and Solana blockchains and are nearly as valuable as these are available. It is true that people do spend a lot of money on NFTs. No one contests this fact, which can be verified by looking at the blockchain.
Why is NFT art so costly?
Depending on their circumstances, people’s reasons for spending a lot of money on NFT art can differ greatly. Most justifications for purchasing NFT art should be covered in the reasons listed below. People who are familiar with traditional art will notice that the same factors that drive up prices for conventional and NFT art are also driving up prices for NFT art.
The most frequent explanation for why NFT art is so pricey is also the most straightforward. This cycle kind of refers to itself. The price of NFT paintings is expected to rise. Suppose someone purchases an NFT for $100,000, and its value increases. This increases the worth of other NFTs in the collection as well.
This fundamental idea may be applied to any NFT artwork.
NFTs have also been around since the beginning of the blockchain. Since CryptoPunk was one of the first NFT collections, having one is like owning a piece of Ethereum history. Ethereum can transform the global economy, investors say, despite the fact that it may not look like much right now. Those NFTs could be quite valuable in the future.
These digital images might appear even more authentic if hyper-realistic virtual reality makes it to the blockchain.
Last but not least, some buyers overpay for NFTs because they anticipate price increases in the future. Because traditional artwork costs a lot of money, this is not always the case.
Awesome profile picture
NFTs have another advantage over traditional artwork in that they may be used to make eye-catching profile pictures. Bitcoin influencers with Bored Ape or CryptoPunk avatars frequently hang out on Discord, Telegram, and Twitter.
The owner has a large workforce and serves as a symbol of the neighborhood. You could liken it to owning a Lamborghini or a Ferrari in the digital realm. However, people with valuable NFT profile photographs might choose to stay anonymous.
Cryptocurrency aficionados are increasingly opting to maintain their anonymity and low profile offline while stroking their egos online by flaunting their prized NFTs. They’re much safer this way because they’re not getting as much attention.
A Honda Civic-driving or salaried anonymous user might be depicted in CryptoPunk’s Twitter profile photo!
Using the Metaverse
Nobody knows what exactly the “metaverse” is. Many people think it involves an immersive 3D experience in the virtual world where people connect, hang out, attend events, and play games with one another. Facebook-owned Meta has changed its name and launched a hiring drive in Europe in an effort to fully commit to the metaverse.
Several NFT projects are already creating 3D avatars for their owners in the metaverse. We can identify ourselves in virtual spaces like Decentraland, Sandbox, and CryptoVoxels by using our 3D avatars in place of our 2D ones on Twitter and Discord.
Also, read – What are Custodial and Non-Custodial NFTs
The bitcoin industry has been quite effective at generating money for its players. According to estimates, there are 100,000 crypto millionaires and 10,000 crypto Deca – millionaires, each of whom is worth more than $10 million.
In our opinion, these numbers are too low, but that is unimportant. The important thing to keep in mind is that it probably took these crypto billionaires only a few days or weeks to get from doing a regular job to being wealthy. Our calculations indicate that they are primarily men with geeky backgrounds in technology.
The IT industry makes fun of those who can afford fashionable clothes or expensive cars. Think about the professions of people like Mark Zuckerberg or Bill Gates. In general, billionaires in the IT sector prefer not to flaunt their wealth.
In any event, NFTs give these people a stage on which to show the rest of their industry how far they’ve gone. Because some people are so wealthy, they’ve created a brand-new way to display their wealth by obtaining specific NFTs.