Non-fungible digital assets hold steady: elite collectors maintain market momentum according to Animoca Brands

The non-fungible token market has experienced a significant contraction from its all-time highs, but far from disappearing, it continues to show signs of vitality among a specific segment of investors. Yat Siu, co-founder of Animoca Brands, states that although volumes have decreased considerably, wealthy collectors remain the dynamic driving force of this digital assets ecosystem.

The non-fungible token market: from peak to stability

Monthly sales of these assets reached a peak of $1 billion during 2021 and 2022, representing a phenomenon of massive speculation. Currently, the market has stabilized around $300 million per month, a figure that, although representing a 70% drop, remains relevant considering that just five years ago this segment was virtually nonexistent.

Non-fungible tokens, which first emerged on the Ethereum blockchain at the end of 2017 with digital collectibles Cryptokitties, have proven to be more than a passing fad. Unlike traditional cryptocurrencies or fungible tokens that are interchangeable, these assets possess unique characteristics that make them one-of-a-kind and irreplaceable, resembling traditional artworks more than conventional financial instruments.

Wealthy collectors: the engine of the fungible and non-fungible asset markets

Siu highlights that high-net-worth investors maintain a particular relationship with these digital assets. During an interview at the CfC St. Moritz conference, he explained that the dynamic is similar to that of classic art collectors: some heirs of business fortunes accumulate Picasso works just as others now acquire collections of digital assets.

“Are these assets still popular among elite collectors? Absolutely. I am a serious collector and share similar perspectives with my peers in this space. We form a community,” Siu affirmed. His analogy is clear: just as a Picasso collector feels part of an exclusive community, the same applies to owners of Ferraris, Lamborghinis, or Rolex watches. “Non-fungible assets are simply the digital version of this luxury collecting phenomenon.”

Concrete examples reinforce this trend. magnate Adam Weitsman has publicly acquired Otherdeed lands — which represent deeds to territories in Otherside, a blockchain-based 3D virtual world developed by Yuga Labs — along with Bored Apes, demonstrating that institutional collectors are committed to these assets long-term.

Although Siu’s personal NFT portfolio has depreciated by approximately 80%, he emphasizes that these were never investments designed for quick resale. “They are long-term assets with real value,” he comments. This approach sharply contrasts with the short-term speculation that characterized the market’s peak.

France and the discontinuation of NFT Paris: beyond digital assets

The cancellation of NFT Paris, which was scheduled just a month ago, should not be interpreted as a failure of the non-fungible token market, but rather as a symptom of broader regulatory changes. Siu notes that France, once a favorable hub for cryptocurrencies, has adopted a radically different stance.

“I consider this an indictment of France itself, which was once very pro-crypto. France has completely distanced itself from the crypto sector. Even projects like Sorare, a fantasy football game based on non-fungible assets, faced regulatory scrutiny from gambling authorities,” Siu explained.

The issue extends beyond regulation. France has recently experienced a wave of kidnapping and extortion attempts against executives and investors in the crypto sector. “NFT Paris was not only a victim of lack of corporate sponsorship. Many of us, including myself, have been deliberately avoiding Paris due to personal security concerns,” Siu revealed.

These factors — regulatory changes, deterioration of public security, and government restrictions — explain the event’s cancellation without attributing it to a supposed death of the fungible and non-fungible assets market. Siu maintains that the sector continues in a consolidation phase where only those genuinely committed to blockchain technology and its long-term applications remain, distancing itself from the speculative noise that characterized earlier phases of the non-fungible token market.