The rise and fall of NFTs

Introduction: The rise of NFTs and inscriptions

Non-fungible tokens burst into the mainstream as a new digital asset class in 2017, promising verifiable ownership of unique digital items on blockchain.

Early experiments like CryptoKitties hinted at the potential, but it was the 2021 NFT boom, exemplified by multi-million-dollar digital art sales and coveted profile-picture (PFP) collections, that cemented NFTs in the cultural zeitgeist.

By representing art, collectibles, and more as tokens on Ethereum, NFTs introduced the concept of digital scarcity and ownership in a way consumers could grasp.

This movement even expanded to Bitcoin in 2023 with the advent of Ordinals inscriptions, a protocol allowing individual satoshis to be “inscribed” with data. Bitcoin, generally thought inhospitable to NFTs, saw its own version of NFTs emerge via Ordinals, treating tiny fractions of BTC as unique collectibles.

Together, NFTs on Ethereum and inscriptions on Bitcoin opened a new era of on-chain culture and speculative investment, creating what many saw as a new asset class of crypto collectibles.

Yet, as with past innovations, rapid hype cycles followed. The NFT market’s story quickly became one of wild ups and downs, a mania of exuberant buying frenzies and celebrity endorsements, followed by a painful bust as reality set in. Bitcoin’s Ordinals brought their own cycle of excitement and excess.

In this report, CryptoSlate will dive deep into that boom-bust trajectory: from the euphoric peak of NFT and inscription speculation, through the subsequent collapse in activity and value, to the current search for stability and meaning in the aftermath. We’ll cover cultural moments (from viral digital art to political collectibles) and on-chain data (trading volumes, wallet stats, and more), reflecting what these cycles reveal about digital culture and financial speculation in the crypto industry.

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