An Insightful Look At Trends In The NFT Space
2021 has turned out to be the year of NFTs. While they have been around for years, they existed only as a niche within the lar2021 has turned out to be the year of NFTs. While they have been around for years (think CryptoKitties), they existed only as a niche within the larger blockchain space. It was not until Q1 2021 that they experienced a huge surge in popularity. By Q2 2021, global NFT sales on the Ethereum blockchain were approaching $1 billion, which represented a growth of 105 times from the same period in Q2 2020 when sales topped out at around $9 million. This represented some of the biggest growth in any market globally.
Popular NFT Categories
The data from Nonfungible.com shows that the most Ethereum NFT sales are the collectibles. These collectibles are NFT items designed as collectors’ items. Some are created as collaborations with celebrities. The most memorable NFTs are CryptoKitties, with the more current CyberPunks and the artist Beeple now ranking as the most expensive. Others include NFTs attached to noteworthy events or shows, whose value grows due to their limited amount. Besides collectibles, there has been a huge interest in art-related NFTs, with some selling for hundreds of thousands of dollars. Even renowned art auction houses such as Sotheby’s have entered the NFT market.
Nonfungible’s data shows that utility NFTs represent the third most popular NFT category. As the name suggests, these are tokens that carry some type of utility. A good example of utility NFT applications could include offering people lifetime membership cards in the form of an NFT, or other “perks, access, rights, and opportunities” for the token holders, or “exclusive experiences, early access to products, entry to members-only virtual and IRL events, or dividends” according to gamified curation NFT platform Blind Boxes
Gaming NFTs are the fourth most popular category. Various games are currently being worked on and they are set to launch soon. Game NFTs allow users to claim in-game items, such as swords, or tracts of “conquered” lands, as NFTs. These items can often have value outside the game and they can be sold on secondary marketplaces.
The fifth most popular categories are Metaverse NFTs, and finally the sports NFTs. However, sports NFTs are relatively new and there are still a lot of developments that are set to take place in this area, as legal considerations involving player contracts and trademarked team logos, for instance, could slow the progress of development of this niche, similarly to comic book, superhero, or movie memorabilia NFTs being released wide scale. More sports stars are entering the NFT space and the ability to sell merchandise in the form of an NFT is something that many find appealing.
Demographics of NFTs
Data by Variety shows that the most interested demographic when it comes to NFTs are those in the aged 15-29 bracket. Data shows that there is a 52% interest in at least one of the categories above. Today’s interest level in NFTs declines dramatically among older demographics, reaching a low in those aged 60 and above. The data shows that only 12% of these current modern seniors said they are likely to engage in the NFT market.
Hurdles Facing NFTs
The data clearly shows that the less-savvy one is, the less likely they are to engage in the NFT space. Currently, it requires one to learn some basic skills above the casual skills of understanding how to use the internet to enter the NFT space. Most interfaces are still not user-friendly for those that are not tech-savvy.
Another issue is that the NFT space is highly fragmented. The Ethereum blockchain is the undisputed leader when it comes to NFTs. However, other blockchains support NFTs as well. Unfortunately, cross-chain interconnectivity is still in its infancy. The fragmented nature of the NFT space also makes it difficult to find out about projects. One has to follow hundreds of influencers online and join multiple online forums to keep up with the fast-evolving NFT space.
Despite the various challenges, the data shows that the NFT space is experiencing unprecedented growth. It is slowly but surely creeping into the mainstream, especially with the boost provided by celebrities, who have joined the NFT space.