The NFT Market is Heating Up, But Will it Last?
After 141 years in the premiership, one UEFA Cup Winners’ Cup, seven League Championship titles, including five Premier League titles, and six Football Association Challenge Cups, Manchester City Football Club has finally created its first non-fungible token (NFT).
Jon Noorlander, a Swedish multidisciplinary artist, helped Manchester City create four new one-of-a-kind tokens commemorating the club’s Premier League championship in 2020/21. A part of the proceeds from the sale of the NFTs will benefit the City in the Community, a charity that uses the sport to help local youth people in Manchester with their mental wellbeing.
Manchester City Football Club is just one organization jumping on the NFT bandwagon. According to a report by NonFungible.com, art enthusiasts and investors spent more than $2 billion on NFTs during the first quarter of 2021. That sum represents an increase of about 2,100% from the fourth quarter of 2020.
Well-known music listening and video services Spotify Technology S.A. (Tii:SPOT) has also entered the NFT market. Spotify seeks to strike a balance for musicians and entertainers by providing a worldwide forum for their work while still ensuring that these artists are compensated for their efforts. While this is not a perfect plan, it’s a step up from the early days of the internet, where people often illegally downloaded songs for free. However, due to the pandemic that disrupted live tours, these same musicians are now facing the lack of a critical revenue stream. By tokenizing songs, audiences can now purchase one-of-a-kind signature works by their favorite musicians – a new revenue source for musicians who cannot tour.
Pinterest, Inc. (Tii:PINS) is one of the brands that gained momentum during the pandemic as millions of consumers found themselves with spare time on their hands amid the lockdown. The image sharing and social media platform boasts 459 million users worldwide and a 48% year-over-year revenue gain in 2020. One of the most compelling aspects of NFTs is their technical links to cryptocurrencies, which are extremely popular with younger investors. As a result, if Pinterest successfully integrates tokenized art into its business model, it could gain new users, generate new demand and potentially impact its share price.
Shopify Inc. (Tii:SHOP) is now indirectly involved with NFTs. Real Items Foundation, a San Francisco-based startup, is beta testing a Shopify plugin to authenticate items sold to online shoppers. The plugin would enable brands to generate NFTs pegged to physical assets. Similarly, Sweet, an enterprise NFT solutions provider, recently announced the integration of its NFT distribution platform into the Shopify marketplace.
While NFTs may have a growing investment appeal, they can also support the creative arts. Andrés Reisinger, an Argentine artist, recently sold ten interactive furniture pieces on Nifty Gateway, with the most valuable piece fetching about $70,000. Meanwhile, José Delbo, an artist who worked on the Wonder Woman comic book in the late 1970s, distributed $1.85 million worth of NFTs portraying the iconic DC Comics heroine. Established art houses are also getting on board with the NFT movement to stay ahead of the curve. Sotheby’s, for example, curates NFT sales through its website.
An honorable mention goes out to the viral and tremendously famous “Charlie bit my finger” video as it is now being taken down from YouTube after 14 years and 883 million views. The NFT sold for a whopping $760,999.
With such a high level of interest from investors, collectors and top-tier sports teams, to name a few, the NFT movement is showing no signs of slowing down.