Last updated on November 28th, 2022
Thousands of artists of all styles use NFT marketplaces today to sell their artworks. The NFT art has drawn investors’ attention after some artworks selling for millions of dollars in the past years. They’re now more interested in knowing what is likely to take NFT prices in the coming years. Such a prediction helps them in making the right investment decisions. This post predicts NFT art price trends in the coming years to help make an investment decision.
NFT (Non-Fungible Tokens) technology has radically changed the way artists make and sell art today. In the bygone pre-NFT era, investment in art was mostly from noble and wealthy people for showcasing their status. Investment is no longer a status symbol in the emerging NFT art or crypto art scenario but a commonplace. An increasing number of collectors, celebrities, investors, artists, and auction houses show their interest in digital assets.
The investors are aggressively pursuing the NFT art to find out which art pieces are collectible in terms of their future high prices. They now keep a closer eye on the cryptographically-unique tokens. As a result, they help create real-world scarcity of digital objects, including artworks. Artists benefit significantly from the scarcity factor and sell art at high prices.
In 2021, the NFT market was $41 billion, while the conventional art market size in 2020 was $50 billion, according to blockchain data company Chainalysis. So, the market size for digital art is steadily catching up with the conventional art market. The hype for the non-fungible tokens has also lured traditional art auction houses like Christie’s to sell NFTs.
The power of NFT art is evident from some examples of how the art can fetch exceptional prices. Beeple’s Ocen Front artwork was sold for $6 million, while the first-ever tweet from the Twitter CEO Jack Dorsey’s sold over $2.9 million. A reason for such phenomenal prices is that NFT makes these art or text products unique and rare due to exclusive ownership. Celebrities like Lindsay Lohan and Paris Hilton have joined the NFT bandwagon.
What determines the NFT art price?
Generally, three factors are responsible for deciding on the NFT price. These are – visual features, past sales of the NFT, and buyers’ and sellers’ popularity.
Visual features are colors, shapes, etc. of the NFTs, digital assets determined using sophisticated computer vision techniques. When it comes to previous sales, the market history of the items from the same collection is the concern. Finally, the popularity of buyers and sellers in the NFT network is about the popularity of each such trader.
While all these three factors play a role in determining NFT art prices, it is believed that 50% of the price fluctuations take place based on previous sales of the artwork. Visual features account for 10 to 20% and the popularity of the traders 10% in the prices. Based on these aspects, it is possible to pinpoint future price trends. Keeping these trends in mind, investors can reduce their risks.
Why should you invest in an NFT art?
Often, people ask that if digital art is downloadable, why pay for it? The answer is that downloading the art will not give you ownership of the image that you can have on your computer or mobile phone. Therefore, such an image has no financial or monetary value.
But the NFT supported artwork or any image means it is an artist’s original artwork. For instance, by downloading the Mona Lisa image or buying its poster, you will not own it, so there is no value. Only the Mona Lisa original painting has value. Similarly, an NFT linked version of the artwork is guaranteed to be authentic and valuable.
Another reason for investing in art is that the cryptocurrency value has increased over the years. For instance, Ethereum is the second-largest cryptocurrency with over $420 billion market value. So, if an artwork sells at 1 ETH, equal to about USD 3269, and appreciates to $10,000, the artwork will be more valuable over time.
However, an investor should treat NFT art investment like any other investment in the physical market. You should research the NFT market thoroughly as not all the NFT platforms are safe and ideal for investment. Ensure that you invest in the available art on reliable NFT marketplaces such as OpenSea, Nifty Gateway, Foundation, and SuperRare. These marketplaces are transparent, as you can see an artwork’s trade data and previous transaction history.
NFT Art Price Forecast for 2022, 2025 & 2030
What will an NFT art value be in 2022, 2025, and 2030? The sale value of NFT art depends a lot on the support provided by the community. It means that the value of virtual art is determined by its potential fan base that supports the art piece.
Also, note that the art market is not the biggest on the NFT scenario, and instead, it ranks third after games and collectibles categories. Just 10% of transactions take place in NFT artworks.
So, no one can correctly predict the value of NFT art one year from now, not to say in ten years. This is because many artwork, tokens, platforms, and metaverses are generated.
There are many cryptocurrencies. Not all of them will be fairing well in the same way. But ETH price trends will be interesting to note as it is the second most used currency in the virtual world.
ETH Price Trends
Today, ETH, [ Ethereum, a blockchain] is the second most used cryptocurrency. So, how the art prices will fair in the future will depend on how the cryptocurrencies such as ETH prices trend. Most NFT marketplaces use ETH to buy and sell artwork and other NFTs. This means that a forecast in the ETH price trends will determine how much investors will earn or lose on their NFT art purchases today.
Keep in mind that the cryptocurrency market is highly volatile, and it is not easy to predict its direction next.
On New Year’s Eve, ETH closed at $ 3811.13, and it surged to $3,337.95 on January 11 this year, 2022. Most investors and traders are bullish on ETH prices since the Ethereum blockchain is increasingly used by dApps or decentralized applications running on a distributed computer system.
Wallet Investor’s ETH price prediction sets it at $6,912 over 2022 and could surpass the $10,000 mark in January 2024. It may reach $19,254 by the end of 2026.
DigitalCoin’s Ethereum forecast was that the price could average $6,380 in 2022. ETH could rise to $7,569 in 2025 and $16,858 in 2028,
Price Prediction estimated that ETH could average $18,213 in 2025, up from $5,881 in 2022, and skyrocket to $110,187 in 2030.
Is NFT art the right investment?
When buying NFT art, it is always a speculative investment, meaning that its price will fluctuate based on the future demand of the art piece. But you can make a good profit if you can pick the uptrend in the art price early. You can then earn many thousands of dollars.
So, investment in NFT art makes sense if you have an eye for the art. You should consider the history of the art’s ownership and how unique its price is. Remember that some NFT market experts have said that NFT hype is a bubble waiting to pop.
Therefore, keep in mind that the digital assets price can cool off at any point in the future. You should weigh the risks involved in the art piece you are putting your money on.
Diversification is advisable to diversify your investment. Mix up your investment in different cryptos to not lose all of your money. NFTs are still in the early development phase, so don’t lose all of your money.
If you plan to start your NFT business, you will first need an NFT logo, which should be an impressive design. With Designhill, a leading creative marketplace, you can have your logo created by dozens of expert designers from the world over. Just launch your NFT logo design contest with your design brief and get the design within a few days.
NFT art is trending and is a much-hyped thing today, but it will stay. Many investors have put enormous money into the NFTs, hoping to earn impressive returns. As a result, NFT art prices are likely to go through the regular ups and downs and will stay high in the future. But make sure that you invest in suitable artworks with a good history of the buyers and sellers.