The NFT market has been dominated by the Art category since the mid of July 2020. It has contributed over 71% of the total volume of transactions. In addition to this, the category of Games has gained immense popularity. The volume of transactions in this category have exceeded 10 million US dollars in March 2021. This trend is expected to continue until the end of the year. In the mean time, NFT prices are expected to increase at a steady rate.
According to the most recent data, the NFT market has reached $2 billion in the first quarter. However, the hype surrounding the NFT has started to wear off. The market’s overall sales have dropped dramatically from a seven-day high of $176 million on May 9 to $8.7 million on June 15. These are back to the levels at the beginning of the year 2021. The trend is not only slowing down, but it is beginning to reach a saturation point.
The nonfungible token trend has changed the value proposition for creators. With NFTs, they can monetize their creative works without the help of record labels, galleries, or publishers. The new ecosystem has also broken down the traditional stratification between creators and consumers. The crypto-rich billionaires are playing a vital role in this trend. It is also transforming the culture of art, and is turning into a status symbol for many people.
Although NFTs are used primarily for digital assets, they can also be used to identify unique physical objects. The problem with this phenomenon is that companies must decide how they will use this unique digital identifier. One example of this is Nike’s CryptoKick patent. The patent allows the company to connect the physical shoes to their virtual counterpart. The owner of multiple NFTs could breed them into a new custom kick.
NFTs are generally traded in collections. Large collections are usually bought by one trader from another. This means that traders tend to buy the same type of NFTs from different traders. The volume of these collections is rising gradually day by day, and is now approaching 2 billion USD. The volume of these transactions is 10 times more than it was in 2020.
Although the market is still maturing, it has already witnessed several high-profile NFTs that have sold for millions of dollars. It is too early to speculate on the actual impact of the NFT market. It will take several years to fully understand the technology and the audience it will ultimately target. As a result, companies should not measure their success by the NFT prices on OpenSea, but instead by metrics that will illuminate the future.
The NFT market is also becoming entwined with digital collectibles. Several brands have gotten in on the act with their own NFT collections. Some of the early examples include exclusive Campbell’s soup can art, Coca-Cola digital apparel, and generative art of White Castle burgers. Those brands that have seen success with the NFT market did not stop after registering a domain name and posting a website. The smart ones will think ahead to the future and start exploring new opportunities.