Here’s what’s on the horizon for the exploding NFT market
While the crypto world remains suspended in a sideways marketplace, the world of NFTs continues to expand, thanks to the jump in interest from major corporations in almost every market sector. And that’s good news for traders, as more blockchains are vying – and succeeding – in taking market share from the leading platform for NFTs, Ethereum.
After a year of explosive growth in 2021, Non-Fungible Token (NFTs) sales have slowed a bit, according to industry reports. While the money may not be flowing as fast right now, that’s not stopping some of the biggest names in gaming, art, sports, and music from expanding their efforts to capitalize on the NFT craze.
How big can the world of NFTs get?
“Over $25 billion was spent on NFTs last year,” according to CNet. “That’s a few billion more than was taken in at the global movie box office.”
The global market size reached more than $50 Billion in 2021, according to Emergn Research, which projects the market will increase to USD 3,57,316.3 Million by 2030.
The potential for NFTs to transform a business is driving change in many industries, starting with NFT creators.
Yuga Labs, the creators of the Bored Ape Yacht Club (BAYC) NFT collection, recently made major moves including the acquisition of intellectual property from rival Larva Labs.
In a landmark acquisition Yuga Labs, creator of BAYC, has recently purchased the intellectual property of both the CryptoPunks and Meebits collections from OG, creators of Larva Labs.
“A page is turned with this acquisition, but the previous rivalry had indirectly generated hype and engagement, two vital elements for a dynamic market,” Nonfungible.com reports. “As in any market, competition can be health and with this acquisition, the rivalry between the two projects more or less ceases.”
The news was followed by an announcement by Yuga Labs that it had closed a $450 Million round of funding and a new company valuation of $4 Billion. The company also provided a preview of its new metaverse, Otherside.
“Already, a new economy is possible with the IP of Apes, Punks, and Meebits, owned by the community,” said Nicole Muniz, CEO of Yuga Labs, in a press announcement. “The possibilities for blockchain’s impact on culture are endless, and so we are building a beautiful, interoperable world for people to explore and play in. There’s a lot to come.”
Meanwhile, the music world continues to grab headlines as more musicians are turning to NFTs to promote their craft.
“Crypto has attracted a strong cohort of rappers over recent years, with icons such as Jay Z and non-fungible token-bull Snoop Dogg both making heavy plays in the sector,” Cointelegraph says. “Other well-known figures to jump on the gravy train include Meek Mill, who snapped up Dogecoin (DOGE) amid the hype last year, Nas, who tokenized his music as NFTs earlier this year and Post Malone, who featured a Board Ape Yacht Club NFT in one of his recent music videos.”
NFT drops by entertainers have power to move the market. “Snoop Dogg launches Board Ape-Themed Music NFTs, Ape Coin Soars,” reports cryptopotato.com, noting native coin APE saw a 13% rise in price in 24 hours after the launch.
Meanwhile, traditional gaming companies (those not using blockchain), continue to try to move their audience to embrace NFT culture.
The push toward blockchain was evident this week at the Game Developers Conference, held in San Francisco.
“This year, a not-so-alien invasion brought a third category: blockchain stuff,” a Bloomberg contributor reports. “GDC’s show floor at the Moscone Center featured a formidable contingent of NFT, crypto and web3 companies. And in conversations with game developers, their ambassadors argue that one day, blockchain too will comfortably nestle between the industry’s existing sinews and vertebrae.”
Research shows gamers are not ready to embrace NFTs, with many citing environmental concerns associated with blockchain’s energy consumption.
“Gamers have not been receptive to early attempts to introduce blockchain-based technologies such as NFTs and cryptocurrency into their games,” ZDNet says. “Initial endeavors have resulted in everything from customer boycotts to internal protests from development staff to customer outcry so vitriolic resulted in immediate cancelations of once-lauded plans.”
But that’s not stopping game companies from moving forward.
GameStop, the game retailer, announced earlier this year that it would launch an NFT marketplace “as part of a turnaround plan,” the Wall Street Journal reported in January. The company formally announced in its recent fourth quarter earnings report that it planned to launch its NFT marketplace later this year. The company is partnering with Immutable X on the project and is offering a $100 Million grant fund in IMX tokens to attract creators and developers.
With more companies embracing and adopting NFTs as part of their business strategies, blockchains are working overtime to grab a share of the market.
In the early days of NFTs, Ethereum, the second largest blockchain, was the go-to for developers. However, other blockchains have been slowly gaining market share in the NFT space. The current market leaders behind Ethereum are Flow, Polygon and Wax, according to a recent DaapRadar report.
“On the Flow blockchain, the launch of the NFL All Day marketplace, along with exclusive and rare NBA Top Shot packs, has produced $188 million,” its February Industry report said. “Flow’s BloctoBay doubled its trading activity in February, while marketplaces like Magic Eden оn Solana or Obkt and Hic et Nunc оn Tezos show that NFTs can thrive outside Ethereum.”
So, what’s on the horizon for NFTs? Plenty. Not everyone can afford the $300,000 entry-level price of BAYC. But for those who watch the market as it morphs and expands, there’s plenty of opportunity ahead to participate in a crypto sector that currently outshines them all.
Joyce Pavia Hanson