- It's inherent in NFTs that they are thinly traded. If each thing is unique, there is no overall market price. Price quotes are anecdotal. There are "indexes" which list prices for transactions, but that doesn't mean you can sell at that price.
- Liquidity is very limited. This works like collectables. Try to unload a million dollars worth of Beanie Babies. It may pay off as a way to monetize fame. Taylor Swift, who has a very good understanding of how to monetize followers, may bring it off. Mark Cuban and his basketball team are doing fine with it. If you have fans, this works. If you're just a fan, well, you're the sucker.
- The NFT industry is trying to become like the diamond industry. Diamonds are mostly hype. Diamond manufacturing is working so well that you can buy gemstones on Alibaba. The diamond industry works to get gemstones into "safe hands", that is, one person with some items of jewelry. A hedge fund with a vault full of stones ready to sell, constantly watching prices, destabilizes the market. NFTs are more like the hedge fund case.
- There's a long history of bulk manufacture of collectables. Beanie Babies. Cabbage Patch dolls. Franklin Mint castings. Commemorative plates. Currier and Ives prints from the 19th century. All of which can be purchased on eBay for low, low prices. There are people in eBay still trying to unload Jar Jar Binks merchandise. The stuff produced in quantity does not appreciate in value.
- The NFT bubble may already have popped.[1] Prices, such as they are, are down 70% since February 2021.
- The real reason for NFTs is that, not being commodities, they are not regulated by the CFTC, and not being securities, they are not regulated by the SEC. So unlimited hype is legal.
[1] https://www.cnn.com/2021/04/05/investing/nft-prices-falling/...