Non-fungible tokens (NFTs) could have been the future of art, but as of now, it is being used as "tax write-off" by businessmen.
As The Guardian describes it, NFT is crypto's cousin in the cartoon art world and a digital identifier that verifies the authenticity of a digital asset.
Lost Interest
The year 2022 was not only the time when cryptocurrency prices were slashed due to investor concerns, increasing interest rates, inflation, and scandals. This was also the year the NFT ran headfirst into the real world.
Nearly $70 million was paid for a digital collage NFT by artist Beeple in March 2021 at Christie's.
Canadian singer Justin Bieber spent $1.29 million in January for a "Bored Ape" NFT, obviously a picture of a bored monkey. These mages from the Bored Ape Yacht Club (BAYC) became the most widely traded collection of NFTs.
A total of 170 different facial expressions, hats, outfits, and other accessories may be used to create a single Bored Ape illustration. The slogan reads, "All apes are dope, but some are rarer than others."
On the other hand, ex-US President Donald Trump, former first lady Melania Trump and NBA legend Michael Jordan have been involved in some NFT activities, too.
Along with the larger crypto market, the interest in NFTs has decreased. It now came to the point that a specific need has sprouted up for collectors wishing to sell off their once-valuable "digital collectibles" as tax losses to balance their income tax liabilities.
Unsellable is a new service, which according to a report, is designed to help collectors whose NFTs have seen a dramatic drop in value.
The 'Unsellables'
The platform was developed to facilitate the sale of NFTs that would otherwise be difficult to trade.
Unsellable will purchase tokens from an individual for a small fraction of their original value and provide them with a receipt that may be used for legal and tax reasons.
In addition, it is hoarding all of the tokens in order to compile "The Unsellable Collection," which presently has 1,600 digital collectibles. The company hopes the archive will serve as the "ultimate artifact of the early days of web3."
Good Sense
It is not hard to understand why purchasers may be eager to dispose of their items for a fraction.
The need for the underlying technology of NFTs, digital certificates of ownership, has dried up.
Between January and March of 2022, around $19 billion was spent on NFTs. Blockchain research company Chainalysis claims that monthly expenditure has decreased by 87% since then.
The total amount spent on NFTs in November was just $442 million, and the number of active NFT traders has dropped by around two-thirds from its highest a year earlier.
Market data compiled by Nonfungible.com shows that on January 16, 2023, about 144,000 NFTs were sold for $142 million.
On Wednesday, Dec. 28, sales amounted to $17,000, bringing in $28,000.
