The ability of non-fungible tokens (NFTs) to ascribe value to anything, from artwork to photographs, has caused them to become extremely popular. NFTs are virtual goods that simulate real-world items like collectibles, works of art, and in-game items. They are traded online, frequently using cryptocurrencies, and are encrypted within smart contracts that run on a blockchain. The market for non-fungible tokens significantly increased in popularity in 2021, with an average sale of USD 38 million in just that year. For instance, MANA, the native token of Decentraland, which is a metaverse platform where users can purchase and sell virtual properties, hit an all-time high market cap of more than US$6 billion after registering a 400% spike in trading value after Facebook announced it was changing its name to Meta.
One of the main drivers of the NFT industry is the global increase in the popularity of digital art. This enables them to use cryptocurrencies to buy digital assets. The money that NFT businesses generate also fuels the development of the sector. The largest sums of money have been given to Paradigm, along with grants from Sequoia Capital and Solana Ventures. The company plans to use the funds to broaden the range of the products and services it offers.
NFT suppliers stand to gain financially from the expansion of non-fungible token applications in supply network administration, retail, and the fashion industry, as well as from the efforts of industry titans to realise the Metaverse and from the personalizability of non-fungible tokens.
They are digital assets like music, artwork, video games, and other media that imitate real-world artefacts. They are built on blockchains and use the same basic software as comparable cryptos. Every one of them has a special identification number and other details to set them apart from one another. Over the forecast period, rising public awareness of NFTs is anticipated to increase industry demand.
Some major companies in the global market report include ScienceSoft USA Corporation, Innowise Group, Inoru, Zfort Group, Blockchain App Factory, Brugu, Chaincella, AppDupe, Crypto.com, and Ozone Networks, Inc.
However, one of the biggest risks is that a variety of factors, including alterations in the law, technological development, or even the expansion or contraction of the NFT market, could have an impact on the value of NFTs. Additionally, there is always a chance that an investor could lose their entire investment if the owner of an NFT decides to sell it. This might occur if the token owner can’t sell their tokens for a price they’re willing to accept or if they fall victim to a cyberattack that steals their tokens. Such elements are anticipated to limit market expansion.
Emergen Research has segmented global Non-Fungible Token (NFT) market on the basis of category, application, and region:
- Category Outlook (Revenue, USD Billion; 2019-2030)
- Collectibles
- Utility
- Art
- Metaverse
- Game
- Others
- Application Outlook (Revenue, USD Billion; 2019-2030)
- Real estate
- Medical
- Academic
- Gaming
- Music & art
- Supply chain
- Voting
- Others
Due to the existence of a virtual marketplace where buying, selling, and owning virtual assets are secure, the metaverse segment is anticipated to experience the highest growth rate over the course of the forecast period. Blockchain-powered virtual reality is used by NFT metaverse systems to connect the virtual and physical worlds.
The gaming industry is anticipated to grow at the fastest rate during the forecast period. GameFi, a hybrid of gaming and financialization, is frequently associated with the Pay-To-Earn (P2E) business model, which pays users for the time they spend using in-game items that have real-world value.
Over the course of the forecast period, the Asia-Pacific Non-Fungible Token (NFT) market is anticipated to grow at a significant rate. Some of the major factors driving the growth of the market in the region include the rise of blockchain games and the rising number of GameFi users. Users in Asia and Oceania showed greater interest in NFTs than users in Europe, Latin America, the Middle East, and North Africa. China ranks as the top nation for NFT searches because it is the largest Bitcoin miner in the entire world.
Growth Motivators
The tokenization of games is one of the significant developments for the sector during the anticipated time frame. In the developing electronic world governed by blockchain, players can buy NFT-based commodities such as digital property, identities, membership to exclusive groups, attire, and weapons for characters. Additionally, it is anticipated that more gaming projects will use non-fungible tokens to promote their services, entice users, and increase user engagement, opening up lucrative opportunities for industry growth.
The market share leader is the segment of digital assets
Because artists all over the world use NFTs to protect ownership of digital creations, the market for digital assets is predicted to expand significantly during the forecast period. Additionally, in the upcoming years, increased awareness of these assets will fuel segment growth.
Because non-fungible tokens allow users to prove their ownership and validate any unauthorised transactions involving their assets, the physical asset segment is anticipated to expand significantly during the forecast period.