In the last blog post, we discussed a specific example of how NFTs can be used by Caribbean Countries – the use case was NFTs in Destination Marketing, as a means to encourage repeat visits via gamification and incentives. In this latest blog post, as the title suggests, we are going to be discussing whether NFTs are profitable or not. In the event you aren’t familiar with the technology or you’re in need of a “refresher”, NFTs are used to easily prove & transfer ownership of items – these items can be natively digital, or they can represent “real world” concepts and objects.

NFTs as a tool to make money
Broadly speaking and as mentioned earlier, NFTs is a technology that is used to easily prove & transfer ownership of items. Use cases include Digital Art, Collectibles & E-Books, Membership Passes, Representative Documents like Real Estate Deeds, Securities & In-Game Assets. The case can be made that the technology adds value independent of its ability to be directly monetised, as it can improve business processes (benefit attribution, reduced IT spend, improved security etc.) and act as a means to differentiate an offering (secondary market value and elimination of sunk costs on the consumer side). The reality, however, is that as at today, consumers are using it primarily as a tool to speculate via trading on secondary markets. That is, the market is mostly buying NFTs with a view to sell it for more money later on, rather than for the value/utility of its properties. But is this profitable? The less direct answer is, certainly not as profitable as it was in 2021. This is primarily down to a matter of volume, which trading is heavily dependent on. In 2021, NFT volume was north of 18 billion USD but in 2023, NFT volume was just shy of 12 billion USD. And where there is less trading volume, there is typically less “profits” as the signal to the market is that the “trend” is weakening. So, from a trading standpoint, it is harder to make money but beyond that narrow view of the technology, there is still opportunity to create value, as NFTs can be used for much more than simply a means to speculate.

In summary, the answer is yes – NFTs are still profitable, it is just a lot more difficult to profit from it in lower volume environments – especially for traders. In the next blog, we will discuss the answer to the question, will NFTs & cryptocurrencies make a comeback?