Opinion: Why I believe there will be another bull market for NFTs?

Author: Ledger team members Kouk.eth, NFT investor Moritz

Compiled by: PANews

Before diving into the main topic, it's important to clarify one point: despite the temporary downturn in the market, NFTs will continue to exist. Market fluctuations are normal, and the crypto industry has experienced similar cycles.

Now, let's get to the point and explain why another NFT bull market is on the horizon.

At this stage, we do see some negative performances in the market, such as:

1. NFT prices have significantly dropped.
2. NFT trading volumes continue to decline.
3. The total number of NFT users has also started to decrease.

However, NFTs will never disappear as some claim, because market cycles are inherently natural; where there are bull markets, there will also be bear markets.

The rise of L2 networks will drive the NFT market to rise again

Do you remember the so-called blue-chip NFT projects like CloneX, Moonbirds, and Doodles, which once had floor prices exceeding $80,000? Now their floor prices are below $5,000. The core of NFTs is digital collectibles, some of which have utility, but their primary value comes from IP + community. The number of NFT projects is increasing, and before the next bull market arrives, this number will only grow. Liquidity will be distributed among more projects, and for most NFT projects, the "cake" to share will become smaller, even if the entire cake plate gets larger.

It is important to note that collecting seems to be a human nature, whether it is physical items or digital collectibles. Therefore, NFTs will not disappear, but the NFT market, which is currently dominated by expensive projects, is likely to change in the future. Mass adoption may occur through cheaper NFTs, with Reddit being a great example, and they are boldly trying to enhance widespread application through L2 (Polygon). After all, paying $10 in fees for a $50 NFT makes no sense.

There is no doubt that layer two solutions will play a crucial role in the NFT market, as L2 will reduce costs and increase transaction speeds, allowing everyone to engage in NFT collecting. For example, y00ts is another typical case benefiting from L2.

However, as more users enter the NFT market, even if most people collect lower-priced NFTs, it will still drive some NFT prices up to a certain extent. Just like different cars, watches, and other collectibles have different price ranges, NFTs are no different.

Based on the above reasoning, the next NFT bull market cycle is likely to see some projects with decentralized liquidity, leading to a more balanced and stable market. A diversified ecosystem will be more beneficial for content creators and NFT holders.

What will the next NFT cycle look like?

As the NFT space progresses, new content creators and traders will enter the market, driving innovation and growth. In fact, this shift has already begun, and this ongoing change is a hallmark of a healthy, mature, and potentially limitless market.

In the next bull market, projects with real value and long-term potential will thrive, while short-term speculation will not yield long-term results. So, which NFT projects should you focus on and hold long-term? In fact, good NFT projects usually have three key elements:

1. Strong fundamentals.
2. Active project founders.
3. Passionate community.

The true value of NFTs lies in their innovation, execution, creating unique experiences, and prioritizing the community during tough times. Frankly, many amazing projects have faced a "Waterloo," so choosing NFT projects requires keen observation. On the other hand, the market will become smarter, and we may see crazy floor prices again, possibly even higher than last time. However, not every project will pump as wildly as before; perhaps new NFT projects will emerge as champions of the next cycle.

So, which projects will be the winners in the next cycle? Having a Web2 audience is no longer important, as the number of people willing to spend $10,000 on a JPEG will decrease. In this context, projects that attract both Web2 and Web3 audiences in the future can trigger the next NFT bull market by generating higher exposure. As these two worlds converge, the resulting growth will transform the NFT space. More importantly, new NFT projects in the next cycle will benefit from the lessons learned from previous projects, leading to better and more innovative initiatives. This improved positive cycle will drive the NFT market forward and even attract more Web2 giants to enter.

Moreover, the increasingly digital world clearly indicates that NFTs will become a part of our future lives. We can see a surge in NFT use cases in several areas, such as:

• Gaming
• Ticketing
• Real estate

As widespread applications continue to expand, NFT technology will be further validated and advanced. Don't forget, the human love for collecting will drive us to keep an eye on this emerging field. The excitement, optimism, and FOMO surrounding NFTs will inevitably trigger another bull market, pushing the market to new heights—this is why NFTs are far from disappearing. We will definitely see another bull market, although certain market conditions are needed, the field will continue to evolve and mature. With advancements in NFT technology and more people entering, the future of NFTs will only become brighter.

Five Key Takeaways

1. NFTs will not go to zero.
2. Crazy price actions are likely to occur again, but only for a very few NFT projects.
3. If the NFT project team has poor execution, even entering the market early will not lead to success.
4. New NFT projects will have a market advantage over older NFT projects.
5. In the future, we will see the market shift towards cheaper NFT projects and the widespread application of L2 in the NFT space.