Despite the potential for gaining wealth through NFTs, experts remain cautious about the market's stability.

• NFT trading volume hit $10.7 billion during the third quarter of 2021
• Currently, the popularity of NFTs mainly revolves around collectibles and digital art.
• Some experts are worried about entering the NFT market at its current price point because of the excessive hype and speculation surrounding it.

In 2021, non-fungible tokens (NFTs) gained immense popularity as unique digital assets, such as artwork and sports trading cards, that are verified and stored using blockchain technology. People created, collected, and traded NFTs for millions of dollars, with some hoping to profit in the future. However, experts remain uncertain about the investment potential of NFTs.

NFT collectibles have generated over $6.2 billion in sales since 2017, while digital art has generated over $1.9 billion, according to NonFungible, which tracks historical sales data of NFTs. Despite being a relatively new phenomenon, the surge in NFTs has already resulted in massive amounts of money exchanging hands among collectors.

According to Jon McCormack, a professor of computer science at Monash University, artworks and collectibles have become the primary commodity of NFTs because they naturally align with the essence of NFTs. The digital nature of NFTs makes them copyable, and the Certificate of Authenticity provided by NFTs is crucial in establishing ownership of a specific item.

There are concerns among researchers that the market, which has experienced rapid growth due to excessive hype and speculation, may not be the best time to enter. According to DappRadar, NFT trading volume increased by 38,000% year-over-year, reaching $10.7 billion during the third quarter.

Michael Every, Rabobank's head of financial markets research for Asia-Pacific, stated that "this may be the pinnacle of the paradigm of everything bubbles." Despite fully comprehending the driving force behind it, he expressed intense concern, particularly regarding its impact on younger people.

Experts advise purchasing an NFT for ownership, not to capitalize on the trend.

Evan Cohen, co-founder of Vincent, advised against purchasing an NFT solely because it is an NFT. Instead, he suggested buying it for the art, collectibility, or community appeal. The underlying technology powering the asset should not be the primary motivation for purchasing.

To learn more about NFTs as an investable asset, watch the video.