NFT market

NFT market Research Report

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Market Overview

The market for Non-Fungible Tokens (NFT) was valued at USD 15.54 billion in 2021 and is anticipated to grow at a revenue CAGR of 34.2% over the following five years. The proliferation of digital assets and collectibles, the expansion of blockchain-based gaming and the metaverse, the quick uptake of cryptocurrencies, the availability of authentication, and the ability to track original owners are some of the major factors influencing the revenue growth of the Non-Fungible Token (NFT) market. NFTs are blockchain-based certificates that attest to the ownership of a certain object, generally in the form of art, though they also have a variety of additional uses in games, collectibles, and financial applications. According to studies, between 2020 and 2021, there was a 450% growth in the number of distinct NFT buyers. It went from having 10,000 buyers a month to having 40,000 buyers a month.

Due to the advent of NFT platforms, NFT trading is presently becoming more and more popular at an exponential rate. Consumer adoption of NFTs has increased as a result of the ease with which they can now be purchased. With more cryptocurrency exchanges offering NFTs, it is anticipated that more people will buy and sell these unique items. Differentiating traits of NFT show how it can provide value. NFT producers also have the option of just producing a small number of NFTs in order to create a shortage of the product. In addition, there are many different ways to trade NFTs freely on some marketplaces, which is driving up demand for centralised marketplaces and driving up the expansion of NFT. Smart contracts, on which NFTs are based, make ownership transfers straightforward. Following the fulfilment of conditions outlined in smart contracts in between buyer and seller, ownership transfers may be completed.

As NFTs may be used to verify the uniqueness of digital content, they are utilised to indicate ownership of digital assets including music, artwork, and video. Therefore, contribute to reducing piracy and make sure that authors are fairly compensated for their work. NFTs could be used to symbolise ownership of physical assets like real estate or cars. This would create a new economy for such assets and provide people the opportunity to monetise them creatively. Businesses can utilise NFTs to show that their goods or services belong to them. By selling NFTs to clients, businesses would be able to make more money. NFTs could also be used to symbolise rewards or points from loyalty programmes that may be used to purchase goods or services. Businesses will presumably benefit from having a fresh way to engage with customers and foster loyalty.

Driving Factors

One of the key causes fueling the NFT (non-fungible token) market’s expansion is the rising demand for digital art on a global scale. Art that is presented or produced utilising digitaltechnologies is referred to as digital art.

The market is expected to develop as a result of the increasing use of cryptocurrencies around the world. This is so that consumers can buy digital assets with cryptocurrencies. CoinMarketCap estimates that as of February 2022, the total market capitalization of cryptocurrencies was USD 1.76 trillion, ranking it as the eighth largest economy in the world.

One of the main elements encouraging the market’s expansion is the investment that NFT businesses have raised. For instance, the NFT marketplace Magic Eden secured USD 27 million in a Series A investment in March 2022.

Paradigm led the funding round, which also included contributions from Solana Ventures and Sequoia. The investment will be used by the business to increase the scope of its offerings.

Restraining Factors

Currently, the NFT market lacks a specific legal structure and laws to verify an NFT’s actual ownership and the supporting copyright evidence. As a result, the risk of copying original works—such as pictures, photos, musical compositions, etc.—is present. Such replicated assets can be easily customised and shared online without the creator’s permission. This is limiting the NFT market’s fundamentals, which is bad for digital artists because it gives original authors entire ownership and allows them to profit from their work.

Opportunities

The Metaverse is a vision of an internet-enabled virtual world where people have avatars and interact with digital assets with Augmented Reality (AR), Virtual Reality (VR). And Extended Reality (XR). This is developing rapidly with the evolution of blockchain technology. Industry experts believe that NFT is going to be the revenue model for the Metaverse. Presently, virtual items are the revenue model in video gaming viz USD 175 billion business annually Since the Metaverse will have digital avatars, NFTs will enable direct access to real-life identities and digital avatars into the Metaverse NFTs are expected to be used in various metaverse use cases, such as user interaction. Socialization, and transactions. For example, in 201 9, an NFT-based token was used as an entry ticket for NFT NYC event. After the  success of this event, many other events started  using NFTs as entry- tickets, fueling the further adoption of NFTs in the Metaverse. With major  players, such as Meta and Microsoft, etc.,  investing in the Metaverse projects are focused on  introducing massive transformations for online  interaction.  

For instance, an NFT-based token served as an entry ticket for an event at NFT NYC in 2019. The popularity of this event led to the widespread use of NFTs as admission tickets at additional events, which accelerated the spread of NFTs throughout the Metaverse. Major investors in the Metaverse projects, including Meta and Microsoft, etc., are concentrating on bringing about significant changes for online interaction. For instance, Decentraland makes it possible to buy Metaverse real estate virtually and displays the locations where users have purchased it using land tokens.

The usage of NFTs as currency in the Metaverse, for both transactions and the acquisition and trade of virtual digital assets like virtual property, is another view held by industry professionals. The Metaverse is therefore anticipated to present NFTs with their greatest chance.

Challenges

The fact that anyone is allowed to tokenize a commodity and that an item’s scarcity does not always ensure its worth is a significant drawback of this technology. Furthermore, in this field pseudonym use is widespread, which undermines loyalty, and fraud is a potential problem.

Fraud can enter this sector through a variety of channels. The NFTs they claim to offer are not even present in bogus NFT stores that have been set up to look like real stores, mimicking one‘s logo and even their content. Another problem with cyber security is the potential for fraudulent NFTs being sold under a well-known NFT artist’s identity by impostors.

Market Segmentation

  1. By the Type of the Product
  2. Collectibles
  3. Utility
  4. Art
  5. Metaverse
  6. Games
  7. Others

The global Non-Fungible Token (NFT) market is divided into collectibles, utility, art, metaverse, games, and others according on the type of product. In 2021, the collectibles market was responsible for a sizable portion of revenue. One of the main elements influencing the growth of the market is the provision of genuine digital materials and art, which enables producers to hold and sell their original digital work. Additionally, NFTs give creators the opportunity to get a portion of all future sales of their works, which is crucial for creators because the majority of sales happen on the secondary market. Due to the availability of ownership, provenance, scarcity, and uniqueness, NFTs make collectibles investable.

Due to the existence of a virtual marketplace where buying, selling, and holding virtual assets are secure, the metaverse segment is anticipated to experience the highest growth rate throughout the course of the forecast period. Blockchain-powered virtual reality is used by NFT metaverse systems to connect the virtual and physical worlds. Metaverse development services enable digital trading on metaverse NFT exchanges. It is a parallel universe where businesses can establish their own NFT metaverse marketplace and communicate with NFT users. Blockchain technology is completely supporting the fair and transparent economy that Metaverse offers, which is helping the market expand.

  • By the Application
  • Real Estate
  • Medical
  • Academic
  • Gaming
  • Music and Art
  • Supply Chain
  • Voting
  • Others

The global Non-Fungible Token (NFT) market is divided into real estate, medical, academic, gaming, music & art, supply chain, voting, and others on the basis of application. In 2021, the music and art area contributed a sizeable portion of revenue. The demand for NFTs in this market is rising as a result of the freedom of expression, enhanced transparency, and ownership that NFTs provide to artists. NFTs are ideal for storing artwork, movies, and music since they are unique and cannot be duplicated. An artist is free to establish a fee when they create an NFT of their work. If someone buys the NFT, they will have perpetual ownership of it and are free to utilise it anyway they see fit.

The gaming Industry is anticipated to grow at the fastest rate during the forecast period. The P2E (pay-to-earn) model, which rewards users for the time spent playing with in-game commodities that have real monetary value outside of the game, is usually associated with GameFi, which combines gaming and financialization. NFTs grant users clear ownership of in-game items that are available for purchase or sale on a decentralised server. NFT-driven play-to-earn (P2E) games, commonly referred to as simply “crypto games,” allow players to own in-game assets including as skins, weapons, digital accessories, characters, and virtual land in the metaverse, and sell these digital assets to obtain monetary incentives.

  • By Geography
  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East and West

The greatest revenue share in 2021 was accounted for by the Non-Fungible Token (NFT) market in North America. A few of the key elements driving the growth of the business in the area include the metaverse’s rapid expansion and cryptocurrency-friendly policies. Major businesses are using NFTs as loyalty or reward points, which is piqueing consumer interest. Well-known auction houses are increasingly hosting online auctions and selling NFT artwork.

During the projection period, the European market is anticipated to increase steadily. Numerous fintech businesses that provide cryptocurrency services and related innovations are anticipated to help the market’s revenue growth in Europe. Balmain will be the first major fashion brand to create an NFT-based membership club when MINTNFT, a superior minting platform, teams up with the brand to present “The Balmain Thread” on the green XRP Ledger at Paris Fashion Week on September 27, 2022. Balmain’s official Web3 partner, MINTNFT, keeps raising the bar for inventive brand experiences.

Over the course of the forecast year, the Asia-Pacific Non-Fungible Token (NFT) market is anticipated to rise at a significant rate. Some of the major drivers fueling the expansion of the market in the region include the development of blockchain games and the rising number of GameFi users. Users in Asia and Oceania showed greater interest in NFTs than users in Europe, Latin America, the Middle East, and North Africa. China ranks as the top nation for NFT searches since it is the largest Bitcoin miner in the entire globe. With 18,717 monthly searches per million people, Singapore was found to be the most interested nation in NFTs, according to study.

Over the past few years, the non-fungible token (NFT) industry in Latin America has experienced rapid growth. The NFT industry is expanding in Brazil and Mexico thanks to the adoption of visual artists and certain well-known figures in the music industry. NFT marketplaces are attempting to take advantage of the market’s tremendous growth potential. In order to fuel their expansion in the NFT industry, businesses are forming strategic alliances with Brazilian football players, who have millions of fans both domestically and abroad.

There has been an increase in NFT-related operations throughout the Middle East and Africa region, particularly in the UAE. The largest contemporary art expo in the MENA region, Art Dubai, welcomed more than 100 local and international art dealers in 2022, as well as a digital network of 17 channels and galleries devoted to showing and selling NFTs. Although there has been a noticeable increase in the purchasing, selling, and creation of NFTs in the UAE, more and more nations are attempting to put harsh regulatory measures on NFTs.

Key Competitors

The Non-Fungible Token (NFT) market is fragmented, and the majority of market revenue is accounted for by a significant number of large and medium-sized businesses. Major players are using a variety of tactics, including mergers and acquisitions, strategic agreements, and contracts, as well as creating, experimenting with, and introducing Non-Fungible Token (NFT) solutions that are more efficient.

Some major Competitors or contributors for the global Non-Fungible Token (NFT) market report are:

  • ScienceSoft USA Corporation
  • Innowise Group
  • Inoru
  • Zfort Group
  • Blockchain App Factory
  • Brugu
  • Chaincella
  • AppDupe
  • Crypto.com

Ozone Networks, Inc