As we reflect on the bygone years of 2021 and 2022, the surge in popularity of Non-Fungible Tokens (NFTs) compelled many of us to dip our toes into the realm of digital ownership. However, according to the latest insights gleaned from Google Trends, it appears that our collective curiosity about NFTs was more of a passing trend than a lasting fascination.
For those who might have missed the NFT wave or didn’t quite grasp the concept during its peak, fear not! Let’s turn to Wikipedia to demystify this digital phenomenon:1 “A non-fungible token (NFT) is a one-of-a-kind digital identifier recorded on a blockchain, serving to authenticate ownership and establish authenticity. Unlike its fungible counterparts, it is impervious to duplication, substitution, or subdivision. The blockchain records the ownership of an NFT, enabling seamless transferability, empowering owners to engage in sales and trades of these unique digital assets.”
NFTs entered the mainstream consciousness when headlines echoed the substantial sale of Beeple’s crypto artwork, “The First 5,000 Days,” at the prestigious auction house Christie’s in February 21st, 2021. This pivotal moment spurred early adoption, serving as a catalyst for numerous U.S. consumers eager to explore and acquire NFTs. Later in 2021 Most Expensive NFT to ever sell was purchased on the Nifty Gateway for $91.8 million USD, the piece titled “The Merge” was created by Pak is the Merge by Pak.
We’ve observed an overall downward trend in the the NFT market for nearly two years. Total sales peaked at 1.17 million both primary and secondary in the best 30 day interval this was in early 2021. As of November 15 2023 the aggregated number of sales recorded on the Ethereum, Ronin, and Flow blockchains over 30 days was around 3.7 thousand.
We’ll start with the NFT art segment, it was one of the hottest segments in NFT sales for NFT’s.
The clustered column chart above at a glance shows the overall downward trade in total volume of NFT art segment sales for both the primary and secondary sale of NFT’s starting April of 2021 to November of 2023.2 The market is displaying signs of subtle crash in NFT art sales starting after August of 2021 and taking a sharp dive in November of the same year. Throughout 2022 there is a steady decline in volume trending throughout 2023. It’s fair to say that the NFT art market is flatlined and is showing now signs of a bounce-back currently. However, other markets such as NFT’s for games, music and products are still showing signs of life. In the case you would be looking at an NFT for art purposes something to note is that September of 2021 was the first time the primary sales were higher than secondary sales. This could be viewed as a sign of changing interest in the market as more projects were being released with focus on utility instead of art. Furthermore, after that September of 2021 the margin of secondary sales were never as high as they were at the peak month in August 2021. We later observed shape decrease in secondary sales coupled with an overall downward trend. January of 2022 and April of 2022 had primary sales lower than secondary sales ultimately leading to August of 2022 where we observed secondary sales eclipse primary sales for every single month consistently to the present date.
We would need to do further analysis to understand if a conclusion of the market returning, marked by an observance of a 30 day period in which the total volume of primary sales over takes secondary sales. This may be a piece of dark data that we explore more in another article. If you analyze this further and reach a conclusion let us know in the comments.
Ethereum is holding firm to over 70% of the overall market with Solana trailing directly behind. There are many new projects coming on-line with both of these platforms, and they are both holding firm as the primary players. As of now the NFT market segments that seem to have growth at the market segments that have direct utility with their NFT’s, such as games and products. As it relates to gaming NFT’s have a synergistic connection in this space and more gaming companies are finding ways to incorporate NFT’s.
Is there space for people who are looking for investment vehicles in 2024? I’m not a financial advisor and I cannot answer that question. However, we’ll take a look at some of the most relevant data on the market and try to understand the NFT space a bit better. I’ve gathered data and statistics outlining the future scope of what the NFT market will look like over the next 3 years.
The world of Non-Fungible Tokens (NFTs) continues to show signs of growth after a massive fall in early 2023. Both creators and collectors are hoping that NFT’s establish themselves as dynamic and lucrative options for investment. Recent data from Statista.com sheds light on the impressive growth trajectory, revealing projections that highlight the NFT market’s growth potential.3
According to Statista’s projections, the NFT market is poised to reach a staggering $1.6 billion USD in revenue by year end 2023. This robust figure is indicative of the market’s exceptional performance and sustained interest from investors and enthusiasts alike. What’s even more exciting is the estimated annual growth rate (CAGR) of 18.5% from 2023 to 2027, leading to a projected total revenue of $3.16 billion USD by the end of 2027.
In 2023, the average revenue per user in the NFT market is anticipated to be $114.8 USD. This statistic underlines the individual economic impact within the NFT ecosystem, showcasing the substantial value users contribute to the market. As the industry continues to mature, this metric is expected to influence and be influenced by evolving user behaviors and market dynamics.
From a global perspective, the United States emerges as the frontrunner in NFT market revenue. The projections estimate a remarkable $781 thousand USD in revenue for the United States alone in 2023. This dominance reinforces the country’s pivotal role in shaping and driving the NFT market, reflecting the strong presence of creators, collectors, and investors within the U.S. digital landscape.
The NFT market is not only growing in revenue but also in user base. Statista predicts that the number of users in the NFT market will surge to 19.1 million by 2027. This influx of new participants signals a broadening appeal, with creators and collectors from diverse backgrounds contributing to the vibrancy of the NFT ecosystem.
User penetration, a key metric indicating the percentage of the population engaged in the NFT market, is anticipated to reach 0.18% in 2023 and is projected to grow further to 0.24% by 2027. This suggests a gradual but steady integration of NFTs into mainstream digital culture, as more individuals recognize and participate in the unique opportunities presented by non-fungible tokens.
The NFT market’s trajectory is showcasing not only its current prominence but also its potential for substantial growth in the coming years. As revenue soars, user numbers rise, and global trends shape the landscape, the NFT market solidifies its position as a transformative force within the digital economy. For creators, investors, and enthusiasts alike, the NFT journey promises innovation, opportunity, and an evolving landscape of endless possibilities.
https://t.co/BajEj08dtg#darkdata #technology #AI #machinelearning #blogpost #viralpost #future pic.twitter.com/2csMHA7v5c
— Curtis Thompson (@CurtisLThompson) November 24, 2023
