Big Buyers Are Driving NFT Resurgence
Following the non-fungible token (NFT) craze we saw in Q1 2021, investor appetite for NFTs declined markedly in Q2 along with the broader slump in cryptocurrencies, as demonstrated by declining sales volumes and prices. To some, NFTs are just jpegs, digital images that anyone can download from the internet for free. But to NFT enthusiasts, they are better than physical art or other objects. Now, seemingly out of nowhere, NFT prices for many sought after collections have jumped in the last week or two and online forums are abuzz with renewed interest in old and new NFTs. There seem to be two drivers behind the resurgence: 1) The success of NFT game Axie Infinity and 2) The entrance of major buyers into the NFT space.
Crypto NFT game Axie Infinity surged in popularity in late Q2, posting strong growth in users and sales of Axies, the game's PokÃ©mon-like creatures. Users need to have three Axies to play, so rising demand has drove Axie sales. The recent success of Axie likely led investors to accumulate other NFTs on the expectation that they too will see a pickup in demand.