Introduction
NFT investors are retreating from digital art and injecting their funds into real estate NFT in the Metaverse virtual world. The real estate market is seen as a more stable investment, with prices that are less likely to fluctuate wildly. There is also a greater potential for return on investment in the real estate market, as the land can be developed and subdivided to create new parcels that can be sold at a higher price.
Investors in non-fungible tokens (NFTs) are beginning to shift their focus from digital art to utility NFTs such as real estate as the value of art NFTs begins to stabilize and even decline when people slowly understand the hype of profile pic NFT. This is evidenced by the increasing investment in real estate NFTs on Metaverse platforms such as Roblox, Decentraland or Sandbox, which allows users to invest in and own virtual properties, like buildings, avatars and digital assets.
The main attraction of investing in real estate NFTs is the potential for a higher return on investment through further development and functionality. In addition, investors can enjoy stable returns through rental income and capital appreciation. Real estate NFTs also offer a more tangible experience that is closer to traditional investments like stocks and bonds.
As the cryptocurrency market continues to mature, it is likely that investors will continue to shift their focus from digital assets to more stable traditional investments.
Causes
In the art world, digital art has been on the rise in recent years. Pieces that were once only available to a privileged few are now being created and sold at a much more accessible price point. However, with this newfound accessibility comes volatility. The prices of these digital assets can change drastically in a short period of time, making them a risky investment.
In contrast, real estate offers stability and security that is often not found in the digital art world due to its progressive development nature. For instance, a when a property is developed, economy starts to form, more values and revenue is created within the real estate and thus the value is sustained and grown. This makes real estate a more reliable investment option for those looking to safeguard their funds.
Additionally, real estate NFT offers other peripheral benefits that are not always found in the digital art NFT. For example, it is possible to generate income from property ownership through rental income or capital gains.
Benefits
Metaverse’s real estate NFTs offer a more stable investment opportunity, with the potential for capital gains and rental income.
NFT investors are retreating from digital art, injecting funds into real estate NFT in Metaverse. In the first three months of this year, the market capitalization of digital art NFTs has shrunk by half. One reason is that digital art NFT projects is always based on community hype and road map that does not show constant development, which diminishes its value rapidly. Another reason is that the artist’s identity can be hidden, making it difficult to determine the authenticity of the work, leading to high risk of rug pull case.
In contrast, real estate NFTs are much less volatile and offer a more stable investment opportunity due to its functionality property. The market capitalization of real estate NFTs has grown by more than 500% in the first quarter of 2019.
Conclusion
NFT investors are turning to real estate NFT in metaverse as a more stable and profitable investment option, among the utility NFTs , Investors are retreating from the digital art market and injecting their funds into real estate NFT in Metaverse. This shift could be indicative of a larger trend in the digital art NFT market, or it could simply be a case of investors seeking security in a more established market. Whatever the reason, this moves away from digital art could have far-reaching implications for the industry as a whole.
