NFT Market Analysis: Market Share and Size, Growth Predictions

In 2022 NFT market will be one of the most popular and profitable markets worldwide. It has gained the interest of thousands of people worldwide, including NFT creators, investors, and even curious spectators. Though many talks exist that NFTs are useless and have a high price, they have penetrated some business niches and industries. So let’s look into the future where NFTs play an immense role.

State of NFT Market

The sales have grown as crypto users have spent more than USD 2.7 billion on minting NFTs. According to DappRadar the NFT market will grow by over USD 25 billion in 2021. The growth started with the appearance and almost instant popularity of various NFT artworks like Bored Ape Yacht Club and CryptoPunks.

At the beginning of 2022, the collapse of cryptocurrency had a massive impact on the global NFT market, recording a sharp fall. Some specialists referred to this phenomenon as crypto-winter. However, in 2022 the number of sold NFTs exceeded those sold in 2021. When the situation is steady, NFTs continue to gain the hearts of art lovers and art creators and involve more people daily.

NFT Market Growth

According to Grand View Research, the global NFT market is expected to reach USD 211.72 billion by 2030, growing at a CAGR of 33.9% from 2022 to 2030. The demand for digital art worldwide is growing, becoming one of the significant factors for the NFT market growth.

Also, the growing use of cryptocurrency globally has become another reason for the market’s growth. People started using cryptocurrency to purchase digital assets. Research has shown that as of February 2022, the total capitalization of cryptocurrency is USD 1.76 trillion, equivalent to the world’s 8th largest economy.

Gaming and digital art NFTs are expected to gain the highest number of NFT transactions. The main advantage of NFTs of digital games is that anything purchased in the game becomes the owners’ property; each object is unique and can be shared among the users without the developer’s permission. NFTs can be moved outside the game, used in other games, and sold on the marketplace.

Game tokenization is another market development reason for the industry growth. Players purchase various NFT-based items such as digital property, outfits, and weapons. It was also estimated that many gaming projects would use NFTs to grab the players’ attention and increase user engagement. This will also become an opportunity for market growth.

The digital art NFTs will push the artists to create innovative artworks that will eventually move the borders of present-day art. When an artwork is turned into NFT, it becomes impossible to duplicate it; thus, the artists will profit more from their work. The result will be that digital art will have a significant share of the global NFT market.

Another critical element for developing the market is the investments received by non-NFT companies. Companies like Magic Eden, Solana Ventures, and Sequoia made investments that will be used to develop the offered operations and goods.

The primary NFT consumers are predicted to be millennials. The demand for NFT is growing among millennials. Research carried out among US millennials has shown that 23% of respondents collect NFT as an investment or a hobby. Some digital game developers have even stated that millennials are the primary users of NFT games.

NFT Market Segmentation

NFT Market by Usage

Based on usage, the NFT market is divided into personal and commercial use. In 2021 private segment dominated the market and occupied a 61% share of the global revenue. One of the main reasons for the segment growth is the growing spending on NFTs. It was estimated that people worldwide spend more than USD 1 billion on digital assets. The individual segment is the fastest-growing segment compared to the commercial.

However, governments of different major countries currently support the commercial use market; thus, the market is also expected to grow in the upcoming years. A lot of companies buy NFTs for various business purposes. E.g., logistic companies are increasingly integrating blockchain technology in operations, thus creating a growth opportunity for the segment.

NFT Market by Region

The NFT market is classified into:

North America: the United States, Canada, and Mexico- the increasing use of NFTs in the region has brought regional market growth. However, in the future, this number will grow and contribute to market growth. Besides the present artists who create digital assets, a growing number of new NFT artists will contribute to the regional NFT market growth.

However, the Asia Pacific (India, China, Japan, Malaysia, Singapore, and the Rest of Asia Pacific) market sector also has high prospects to grow. India, China, Japan, Malaysia, Singapore, and other countries have already adopted cryptocurrency; this will contribute to market growth in the Asia Pacific region. Other reasons are that many regional startups use metaverse platforms, and developing gaming industries in the area will contribute to regional market growth.

NFT Market by Application

Based on application, the market is divided into Collectibles, Art, Gaming, Sport, Utilities, Metaverse, and Others. Globally, collectibles produce the largest NFT market revenue share. The increasing demand for the assets is connected with its advantages. E.g., video game players exchange NFTs and continue playing, artist collectibles connect with their clients and sell their work, whereas sports collectibles let fans interact directly with their heroes.

NFT Market by Type

The NFT market is divided into primary and secondary markets. The primary market is the original sale of an asset, whereas the secondary market is the sale of an NFT already sold on the primary market. Now art, games, and sports segments occupy the biggest share of the primary market. As NFTs become popular among digital artists, many artworks will appear on the primary market.

Meanwhile, the secondary market will remain limited as the buyers hold the digital art to get good ROI in the long run.

NFT Market By Cryptocurrency Usage

All the transactions on NFT marketplaces and gaming platforms are done using cryptocurrencies. Ethereum (ETH) is the most widely used cryptocurrency for trading NFTs.

Cryptocurrencies are used for NFT transactions because it is fraud-resistant, and all the transactions are uploaded on a public ledger. The cryptocurrency checks and controls the transactions, ensuring secure digital transactions.

Who are Market Leaders?

The NFT market possesses tough competition. Market players are focused on strategies that will help them improve their position in the market. Many companies have become partners with well-known NFT companies to ensure their place in the market.

On the other hand, market companies are focused on enriching their product offerings to meet changing customers’ needs and stay competitive. As a result, companies invest in research and development of NFT technologies. The companies collaborate with universities to broaden the technical development support and create a market growth opportunity. Major NFT market players include

YellowHeart
Cloudflare
PLBY Group
Dolphin Entertainment
Funko
Ozone Networks
Takung Art Co.
Dapper Labs
Gemini Trust Company,
Onchain Labs

How NFTs Can Change Business World

Document Flow

As NFTs contain unique and inimitable information certificates, licenses, and university degree documents can be tokenized, even medical records, birth and death certificates, and even driver’s licenses, visas, and passports. The certification or identity can be issued through blockchain as an NFT. They may also be tracked to the owner. Employing NFTs in these fields will give better documentation control and prevent personal information flow.

Real Estate

Real Estate companies and businesses can also make use of the NFT market. NFTs have applications for selling digital real estate in both the virtual and real worlds. In the virtual world, digital real estate applications allow players to create, purchase and sell areas in a virtual world. These NFTs can be exchanged on NFT marketplaces that are more efficient and transparent than real-world real estate transactions. Ownership of virtual real estate is recorded on a decentralized ledger through an NFT and its owners.

In the future, using NFTs and blockchain in the real world could become an effective way to verify real estate ownership history.

Logistics

In this case, NFT’s primary role is authenticating and verifying products’ origin in the supply chain. NFTs are also useful for logistics as they can help to trace the movement of goods within the supply chain. Due to their transparent character, they can keep the supply chain data authentic and reliable. They may also be used to track recyclable and sustainable materials.

NFT Market Trend and Challenges

Predicting the trends and challenges of the NFT market that will affect its growth will help the companies evaluate and develop NFT growth strategies.

A lot of big brands are entering the NFT market. These brands are interested in buying NFTs, which will positively impact the industry.
Even e-commerce brands such as eBay Inc. and Amazon are interested in NFTs.
These changes will increase the number of transactions in the NFT market and foster market growth.
The biggest challenge to NFT market growth is uncertainty.
As an NFT value significantly depends on its scarcity, uniqueness, and buyers’ perception, it will be hard for a new artist to gain recognition.
It is also challenging for investors to predict the upcoming trends as the NFT market constantly changes and develops.

NFT Future and Predictions

The NFT market is predicted to give more freedom to the creators., which means that there will not be any central controlling body. Content moderation will be removed, and more places will be given to self-expression.

Creators will earn money, take the actual income from the sold NFTs and not depend on the third party that charges some fees. Thus fans and collectors will be able to support their favorite artists directly.

With the growth of technology, many new methods for creating NFTs and NFT media are predicted to appear.

The market is predicted to have an investment flow as soon as the investors realize the market’s potential.

As the gaming segment is one of the biggest ones and NFTs are widely used in video games, the segment has great potential to grow.

Though the field has a lot of different ways and a huge potential to grow, some experts still believe that this bubbly, like any other, will eventually burst. The current buzz led to the situation where a photo is sold for millions of dollars. Unlike copying physical artwork, copying a digital one is more accessible. This situation can make the artwork less valuable, and the market will lose its power. Fortunately, many facts show that the future scenario will differ, and NFTs will keep growing.

Nadya Morrison

Nadya Morrison is a data analyst and passionate content writer with more than 8 years of expertise and writes about tech and innovation. She is a human rights and environmental activist trying to make the world a better place.