According to data from CRyptoSlam, over $2 billion has been spent on NFTs in the past 30 days as of March 23, 2022. So why do people buy NFTs? As of now, it seems to be mostly FOMO. While NFTs have been around for nearly five years, it is only in recent months that the world has developed an interest in the sector.
Thus, it might be interesting to find out why do people buy NFTs. Most investors and experts say it is a combination of several factors. Here is a breakdown of what might be driving growing interest in NFTs.
Why Do People Buy NFTs
According to experts, drivers of interest in NFTs might be a combination of the rising price of BTC, the impact of the pandemic, and growing distrust in the dollar.
BTC hit an ATH of $69,000 in November 2021, which led to renewed interest in the crypto sector.
Another important factor is the pandemic. Since the pandemic began, people have had fewer opportunities to spend money. As a result, they have saved most of their money.
With so much in savings, people have been looking for ways to spend while in lockdown. Inevitably, a significant chunk of them came upon the crypto sector.
Another important factor is the growing distrust in the dollar after it hit a new ATH in terms of inflation. The level of inflation the dollar is experiencing has not been experienced in decades. AS such, if one’s wealth is held primarily in dollars, they would have seen it drop as inflation bites.
All of these factors would have pushed people to try their luck with NFTs.
After all, it did not seem to hurt, and a small investment could pay off in a huge way. For a long time, the use of art to store value has been well-documented.
NFTs just offer a more modern approach to investing in art and using it to store value. While the pandemic accelerated the NFT boom, the product itself would have eventually driven interest in it.
For many industries, especially in the music world, sales worth millions of dollars by Grimes have no doubt driven interest in the sector. For many struggling artists, the opportunity to turn their art into an NFT and make millions is an opportunity they could not overlook.
Will the NFT Boom Wane?
According to some experts, NFTs are not a bubble but that does not mean they have staying power. They point to the internet, which was often thought of as a fad when it was invented.
However, in the decades since its invention, it has changed the lives of billions of people globally. Despite this, many of the projects in the early days of the internet were overpriced, and they failed.
In short, while NFTs may stay for a long time, they could eventually reach a peak before market correction sets in. For now, there is still a lot of room for growth. The reason for this sentiment is that a huge chunk of the world does not own crypto wallets. Estimates claim that only around 1% of the global population own crypto.
