A quick look back at Google’s top searches of 2021 highlights terms such as “NTF” and “Bitcoin.” The search engine’s top-ranking also showed that searches for “How to buy Bitcoin” outperformed searches for “how to buy stocks.”
In this context, the success of NFTs (Non-Fungible Tokens) was the big news of the year, with several digital art pieces being sold for millions in specialized auctions. Plus, NFTs are also attracting younger people – on average aged between 30 and 39 years old – among their many retail investors.
However, will all this success continue into 2022, or is it all just a hype train? Will demand for NFTs in the new year be based on utility or scarcity? Keep reading to find out.
Hype Train vs Solid Growth Tendencies – A Quick Look at The Current Scenario
The growing popularity of the term NFT can be measured by the investment ruler. Globally, the market grew by $2.5 billion in the first half of 2021, driven by the art market, as well as advertising and marketing. If you ask us, buying NFTs when they’re cheap is a good way to diversify your profits from spot trading, futures trading or options trading at Bitlevex.
Accordingly, several high-end companies such as Taco Bell, Coca-Cola, Campbell’s, Budweiser, Microsoft, Nike, Marvel, and Warner Bros. are carrying out large projects using non-fungible tokens.
As provided by expert David Gobaud, the expansion of NFTs is expected to continue into 2022. Gobaud states that “NFTs are rapidly expanding the art sector and making art more accessible to more people. Nike releases official tokens and projects.”
Increasing Consumer Maturity for Crypto-Based Solutions – How Will It Affect NFT Valuation?
According to monitoring by the website NonFungible.com, the primary NFT market, where assets are in their initial stage of issuance, still dominates this universe.
In the most mature part of the industry — called the secondary market — where users buy and sell NFTs from each other, 65% of the tokens purchased resulted in a profit, according to trading platform OpenSea (considered the world’s largest NFT marketplace).
However, it’s not all sunshine and rainbows in the world of NFTs. The launch of unprofitable NFTs, the risk of a bubble, in addition to the environmental impact issues for their generation, are some of the discussions around this type of asset.
Even so, regardless of the recent astronomical numbers associated with NFT auctions, this new technology has demonstrated the ability to make it possible to carry out projects in Metaverse and gaming, which makes it possible to have digital assets represented by NFTs.
Does Ethereum’s Performance Influence the NFT Market?
The world’s second-largest cryptocurrency – Ethereum (ETH) – is based on the most commonly used protocol for creating NFTs. In 2021, Ethereum was the best performing digital asset within the crypto industry – which directly affects projections for Ethereum-based NFTs.
ETH yield from the beginning of the year to December 22 was +482.60%, followed by Bitcoin (BTC) +83.71%. Still, in 2022, different projections point to a scenario of greater maturity of negotiations in NFT investments.
Ultimately, the plethora of ideas regarding NFTs in 2021 brought much more solid use cases than a simple euphoria around the topic.
Many companies have wondered what they could create with NFTs, as the possibilities are virtually endless. In other words, due to the diversity of offers, NFTs have created a new landscape of opportunities for investment diversification.
Currently, the NFT market is more retail-oriented (overall, more than 80% of all transactions were under $10,000) than the traditional cryptocurrency market, which continues to excel.
Will OpenSea Maintain Its Place As the World’s Leading NFT Platform?
In 2021, OpenSea proved to be the world’s number one marketplace for NFTs. No other NFT platform has come close when it comes to user count and sales volume.
Additionally, OpenSea started the new year strong. For example, the NFT market hit an all-time high for one-day sales volume on January 2nd. That day, it recorded sales of $240 million.
Regardless, different NFT markets and platforms will be launched in 2022, with the hope of loosening OpenSea’s grip on the market – or at least matching its relevance among users within the NFT space.
Amid this ecosystem, crypto juggernaut Coinbase has already announced that the company would launch a platform focused on non-fungible tokens. Currently, Coinbase has around 73 million verified users.
Compared to OpenSea (which has between 1 and 2 million users), Coinbase has a gigantic prospective customer base with the potential to eventually match – or maybe overcome – the current world’s leading NFT platform.
The State of NFTs in 2022 – The Verdict
In the world of non-fungible tokens, all the hype around collectible digital artwork was only the beginning of a larger-than-life story.
Ultimately, NFTs are fun, culturally relevant, users can actually “see” them, and they are easier to understand than many other blockchain concepts. In 2022, factors such as the Metaverse, play-to-earn games, and many others will certainly impact the way users interact with NFTs.