NFTs Become Dinosaurs and Now Will Be Seen in Museums Only!

Even as museums are buying up NFTs, some might argue that NFTs Become Dinosaurs soon

Museums and NFTs: What's the opportunity, who's doing it best and why? Question marks remain? While some might argue that non-fungible tokens or NFTs become Dinosaurs and have always been uncool — or at least not cool enough to justify BAYC-level price tags — there's now a surer sign than ever that the digital assets are doomed to perpetuate outmoded to be: Museums apparently love 'em, after The New York Times.

"Our collection… [seeks] to embrace some of the most pressing and topical art and ideas happening today," Alex Gartenfeld, the artistic director of the Institute for Contemporary Art (ICA) in Miami, told the newspaper of Record. "In the last two or three years, one of the most pervasive and transformative conversations has been about how artists explore and develop their creativity through NFTs."

NFTs become Dinosaurs but not for museums

In July 2021, a portrait of a woman with frumpy hair, purple lipstick, and a mole on her right cheek entered the collections of Miami's Institute of Contemporary Art. The work was not a centuries-old oil on canvas. It did not once hang on a wall. The artwork was a nonfungible token, or NFT — one of 10,000 unique, algorithm-generated 24-by-24 pixel digital images — created in 2017 by the Larva Labs collective.

"CryptoPunk 5293" (the work's title) is part of the CryptoPunks series, which, in just five years, has racked up about $800 million worth of sales on the Ethereum blockchain exchange, according to its website. By acquiring the work last year (as a gift from a trustee), ICA Miami became one of the first museums to collect NFTs. And it has added two more NFTs this year.

According to the NY Times, other museums are also acquiring NFTs. Others, like the Uffizi Galleries in Florence, Italy, and the British Museum, are minting and selling them from works in their collections. And artists are being encouraged in their efforts to produce digital art.

But even as museums are buying up NFTs, the market for them, and for the cryptocurrencies that they are traded in, has plummeted. Trading volumes are down 97 percent from peaks reached in January. In the latest sign of the market's distress, the FTX cryptocurrency exchange filed for bankruptcy on Nov. 11, inflicting billions of dollars in losses on its clients and investors.

New York's Museum of Modern Art

New York's Museum of Modern Art (MoMA) was also planning to buy non-fungible tokens (NFT) with some of the proceeds of an auction of William S. Paley's art collection, according to the Wall Street Journal.

The museum planned to sell $70 million worth of the collection gathered by the founder of the CBS broadcasting network, which it has been holding since he died in 1990, the Journal said. The collection includes Pablo Picasso's 1919 "Guitar on a Table" as well as works by Renoir and Rodin. Sotheby's will auction off 29 of Paley's 81 pieces at MoMA later this year.

The museum's director, Glenn Lowry, said the intention is to extend the digital reach of the museum after attendance slumped during and after the pandemic. The museum has a team of people keeping tabs on the digital art market and it is considering purchasing digital art connected to NFTs, Lowry said.

NFT market worth $231 billion by 2030?

According to the report released by the consulting and global research firm VMR (Verified Market Research), the overall value of the NFT market is expected to rise to $231 billion by 2030.

The 202-page research report on the NFT market space published by VMR said that the global NFT market would be valued at $11.3 billion in 2021. As per the report, the sector is predicted to grow by a 33.7 percent compound annual growth rate in the next eight years.

The increased demand for NFTs can be attributed to their diverse use cases across multiple industries, including games, music, film, and sports. The report identifies principal use cases and areas of interest that encouraged NFT sales.

VMR report colours the gaming industry as the major driver of adoption, with Enjin being the first gaming firm that integrated its infrastructure with blockchain technology to release its own token, ENJ. Enjin transformed the assets of the game world into NFTs so that the gamers could monetise them. Axis Infinity (AXS) tapped into the NFT market space by introducing play-to-earn gaming to its users. In the Philippines, Axie Infinity granted an alternative source of income to gamers during the COVID-19 pandemic. AXS gained the attention of regulatory bodies and was a subject of interest after the play-to-earn addition.

In the sports industry, the report mentioned Dapper Lab's partnership with UFC to launch UFC collectibles. UFC Strike is similar to NBA Top Shots and uses NFTs to monetise and digitize moments from UFC matches.