With the rise in digital asset prices in the past few months, many NFTs haven't seen a proportional increase in worth. This trend is multifaceted, as digital assets are now much more dispersed across a variety of blockchains like Bitcoin, Tezos, Solana, and various L2s - diluting their “original” presence on Ethereum. So far, high-value NFTs and pieces one might consider “true art” have been overshadowed. Meanwhile, L2s like Base and Zora have brought in a wave of more casual, nonchalant NFTs. Simply minting all forms of media, with no large expectation of value. This has once again broadened the scope of NFTs, they’re at the intersection of intersections. NFTs haven’t been solely associated with art for quite some time.

The question of when we'll return to appreciating art for art's sake is pressing. Snofro, the founder of ArtBlocks, champions the notion that doing it right is better than overproducing - a sentiment that resonates in an era of the latter. The art world knows well that hype attracts a crowd, but it's the subsequent downtrends that leaves behind a core of true collectors. A new foundation to work from.

The recent “memecoin supercycle'' has prioritized the accumulation of more liquid, easily traded tokens over the less fungible, art-based NFTs. This isn’t necessarily negative. A new rally in digital art could be sparked by this wealth effect, where newfound riches in other areas of crypto lead to innate changes in taste. As wealth grows, so does the desire for distinction, often expressed through the acquisition of rare digital assets. In the vastness of the internet, owning unique digital art becomes a powerful statement. Does art just have to play the waiting game?

Early indicators suggest this shift is beginning; a rare 0-Trait CryptoPunk recently fetched 270 ETH - the second sale of such in the past few years. Collections from ArtBlocks are gaining volume, and XCopy art is finding buyers. Despite skepticism around “provenance” as a selling point, onchain depth seems to maintain value in digital art. Detractors argue that NFTs are past their peak of interest, but lessons from the traditional art world tell a different story. Cultural staples and fresh aesthetics will always coexist and thrive. On the note of “fresh aesthetics”, Botto, a decentralized autonomous artist, is also making waves with significant recent sales. This suggests a future where art that resonates on a contextual and aesthetic level will persist. How far this compounds lies in the wealth effect; as new money enters the space, expect a shift back towards those being in it for the art.