Non-fungible tokens (NFTs) have become a popular way to buy and sell digital artwork. But NFT art can vary wildly in price, from a few dollars to millions. What exactly makes NFT art accrue value over time? Here are the top 7 reasons why NFT art increases in value:

Artist Reputation and Brand

Like traditional art, the prominence and reputation of the artist plays a huge role in NFT values. Works by anonymous or little-known artists sell for far lower prices than pieces by celebrity artists like Beeple and Pak. Building an artist brand in the NFT space takes time but can pay off handsomely.

 Scarcity

NFTs are unique by design, but scarcity also depends on the number of editions minted. A 1/1 NFT artwork is inherently more scarce than a piece with multiple editions. Limited edition drops with only a handful of NFTs carry premium pricing.

Utility

NFT art that offers real-world utility and benefits like special access, royalties, or social clout tends to accrue more value than generic image NFTs. Utility transforms a mere jpeg into something more valuable.

Social Signaling

Owning certain NFTs functions as a social status symbol akin to wearing designer fashion brands. Projects like Bored Ape Yacht Club and CryptoPunks have value partially derived from their selective membership and signaling value.

Speculation

Like most assets, expected future demand plays into NFT prices. Speculation on rising popularity drives up valuations. But this is a double-edged sword, as speculative bubbles can later burst.

Crypto Market Cycles

Since NFTs are priced in cryptocurrency, prices correlate strongly with the ups and downs of the crypto market. Bull markets create euphoria and higher sales, while bear markets plunge NFT interest and valuations.

Liquidity

NFT art that has more marketplace trading volume and liquidity makes it easier to find buyers and sellers to transact. Illiquid NFTs with minimal trading activity tend to languish or take longer to sell.

Browse Our Marketplace for Rare NFT Art

We hope this overview was useful for understanding the key factors that drive NFT art valuations. Want to browse unique digital artwork to buy or get inspiration? Visit our online NFT art marketplace now to discover amazing one-of-a-kind pieces!

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