NFT Market Potential

In 2020, the blockchain technology market witnessed a rapid growth in Decentralised Finance (or DeFi). However, the popularity in DeFi was exceeded by the growth and popularity of NFTs, making it the most prominent trend of the sector in 2021.

Based on the data, there was an exponential growth in the marketplace for NFTs during the first quarter of 2021, both in unit value and volume.

As per Forbes, in the first quarter of 2021 (FY2021 Q1), NFT market capitalisation increased by around 1785% to over US$432 million.

Further, it is estimated that the total trading volume of the major NFT platforms increased 25X from US$30.1 million in December, 2020, to over US$226 million in March, 2021. Essentially, over US$2 billion was spent by individuals on the purchase of NFT collectibles.

Mainstream media outlets have also extensively covered the novelty surrounding NFTs. Further popularisation of NFTs in mainstream media has also occurred as a result of the unique digital assets being purchased and adopted by several celebrities and investors.

For instance, as mentioned earlier, in March 2021, world-famous auction house Christie sold Beeple’s digital artwork, “Everydays” for a record-breaking US$70 million.

Due to their popularity, as a medium for digital creativity and as an asset, several known artists are now entering the sector with their own flagship digital artwork and NFTs. Such popularity amongst creators makes the NFT marketplace poised to witness even higher yields than the high growth observed in the first quarter of 2021.

After experiencing momentous expansion in the first quarter of 2021, the NFT marketplace has demonstrated some signs of price stabilization. However, with the introduction of new works and digital works, it is expected to continue attracting investor and use attention in the final quarter of 2021.

For instance, NonFungible.com estimates that the market capitalisation for the sector could reach over US$700 million by the end of 2021.

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