It has value because..
It is unique
People value it.
People laugh etc but it's no different to many other things. Modern art for one.
Yeah, I think you're right in that that's part of it for sure, especially w.r.t. the individual items.
I think there are some additional aspects too - there is more speculation here thinks to the presence of exchanges and ease of being able to buy and sell, you'd have difficulty buying then flipping modern art pieces within a day or within hours, not as much liquidity there, but with NFTs there have been cases of people buying an NFT seeing it double in value and the selling it the next day.
There is the collection aspect, not all NFTs are all that unique, some are part of a wider collection, they're unique in so far as some features go to distinguish them from other NFTs within that collection but they're identifiable as part of that overall group. That lends itself to some of the value being that you're part of a "club" so to speak, it's not just the uniqueness of the item but rather the item being a sort of expensive status symbol a finite number of people have... hype is then built around that general collection. It's laid out clearly in the name of one collection even - "bored ape yacht club", you buy one of those things and you belong to that special club of owners of that thing.
Lastly, there is the easier to manipulate aspect, auction houses have always had the risk of shill bidding, exchanges have had the risk of "wash trades" (people trading with themselves to bid up the price), with NFT marketplaces someone with a bunch of crypto wallets could just bid up their collection, combine that with the wider population of speculators/traders looking to take advantage of NFT speculation and the ease in which you can buy and sell them then all sorts of stuff can be bid up to silly prices while other stuff sits unnoticed.
