Non-fungible Token (NFT) Market Size (2023 – 2030)

The Global Non-fungible Token (NFT) Market was valued at USD 14.5 billion and is projected to reach a market size of USD 152.54 billion by the end of 2030. Over the forecast period of 2023-2030, the market is projected to grow at a CAGR of 34.2%. 

A non-fungible token is a type of digital identity stored on a blockchain that is used to verify ownership and validity. It can't be duplicated, replaced, or split. This is a relatively new type that came around in 2015 and has seen decent growth in recent years. It allows artists, gamers, and other entertainment users to monetize money and create a new source of revenue stream. With new emerging technologies and updates in blockchain, this market has immense potential for future applications. During the forecast period, this market is projected to see a notable growth.

Key Market Insights:

• The NFT sales in the art industry reached 2.57 billion in 2021 from 20 million in 2020.

• NFT transactions in the Collectibles reached around 8.6 billion in 2021.

• According to CoinMarketCap, as of February 2022, the total global capitalization of cryptocurrency is USD 1.76 trillion, making it equivalent to the world’s 8th largest economy.

• As per research, Ethereum-based NFT accounted for USD 443.55 million of the USD 568.19 million NFT sales.

• Intellectual property rights are one of the major concerns faced by the music, art, and entertainment industry. To address this, NFT platforms are adding verifications and metadata to prevent identity theft.

Non-fungible Token (NFT) Market Drivers:

Improvements in the gaming industry have played a huge role in driving market growth.

The digitalization of games has been a boon to the market. Players can get into exclusive groups, organizations, and communities. They can purchase stuff for their characters like weapons, clothes, and identities, and take up membership as well. Additionally, they can monetize this money as digital payments. With the advent of new, thrilling, and exciting games, more users are expected to register. Continuous work and updates are happening to enhance user engagement, graphics, and other things that satisfy the players. According to Forbes, after offering gamers with an alternate source of money during the epidemic, Axie Infinity witnessed a jump in user growth in the Philippines. As a result, the gaming business has established itself as a significant development opportunity for NFT, notably in the blockchain gaming model. As per a report, data on DappRadar showed that a digital card game called Splinterlands generated 4 million in revenue in August 2021. With the piqued curiosity and enthusiasm of the Millennials and Zillenials this market is further projected to show profitable growth in the coming years.

The increasing involvement of performers is propelling the market expansion.

Content and podcast creators, celebrities, artists, musicians, etc. have started to upskill themselves. They can sell their workpiece through these platforms and earn more money from the comfort of their house. It is extremely beneficial for people who are new in the business because it can help with contacts and widen their knowledge. The ownership is primarily with them. Due to this, if somebody wants to reuse or reupdate their work, they immediately can trace and earn more if they decide to resale. Moreover, they can stay connected with the worldwide fan base and increase their engagement seeking profits. The options and opportunities provided in this platform make it very attractive encouraging more performers to register here. In fact, during the pandemic, there was a record of more users who registered further propelling the growth. As per a report, approximately 28,000 NFTs were sold under the art segment in April 2021.

Non-fungible Token (NFT) Market Restraints and Challenges:

Ownership, investments, technological advancements, and environmental damage are the main barriers currently faced by the market.

One of the major concerns is copyright fraud. Duplication of original works can cause significant losses to the creator demotivating the individual to continue. Secondly, the initial costs associated are very expensive. Due to constant fluctuation, this can hamper the growth rate. Thirdly, the technology can be a little complicated to understand leading to mistakes and wrong investments by the user. Furthermore, tackling environmental issues is challenging. Ethereum is known to consume a vast amount of energy leading to an increased carbon footprint.

Non-fungible Token (NFT) Market Opportunities:

An emerging opportunity in this market is Metaverse. The metaverse is a new three-dimensional digital realm that employs virtual reality, augmented reality, and other modern internet and semiconductor technologies to provide individuals with lifelike personal and professional experiences online. Metaverse has digital avatars and NFT will have control and access to all these identities. NFT is predicted to be the biggest model for income generation in Metaverse. This will enable virtual art galleries, ownerships, performances, and many more. As per a report, industry experts believe that NFT can be used as a form of currency for purchasing assets and transactions virtually. Extensive research, incoming business models, and emerging technologies will play a huge role and provide this market with an ample number of opportunities.

NON-FUNGIBLE TOKEN (NFT)  MARKET REPORT COVERAGE:

Non-fungible Token (NFT) Market Segmentation: By Type

• Physical Asset

• Digital Asset

Based on type, digital assets were the largest and fastest growing in the market owing to factors like decentralization, awareness amongst the public, security, accessibility, tracking of transactions, costs involved, control, ownership, technological ease, legitimacy, demand, presence of popular artists and other entertainers, and media publicity. This is estimated to hold more than 75% of the market approximately. During the forecast, this will show immense growth and potential.

Non-fungible Token (NFT) Market Segmentation: By Application

• Collectibles

• Art

• Gaming

• Utilities

• Metaverse

• Sport

• Others

Based on application, collectibles are the largest growing in this market. Collectibles include any form of artwork, cards, or any such virtual items holding a lot of worth. The main reason is because of the demand that allows artists to sell their work globally. Additionally, authenticity and authorship contribute to the success. The dedicated online channels offer customization as well as fueling the expansion. They are estimated to hold a share ranging around 20% to 30%.

The gaming segment is the fastest growing. This is because of their association with P2E (pay to earn) model which gives a good income to players for spending their time on these games. They can even monetize by buying as well as selling these games and claiming ownership. They can possess various virtual things like characters, accessories, and other weapons and sell them as digital assets to other players. Established gaming systems are coming up with various innovations to further expand the network. This holds a share exceeding 20% in the market.

Non-fungible Token (NFT) Market Segmentation: By End-Use

• Personal

• Commercial

Based on end-use, the personal segment is the largest and fastest-growing end-use. The rising spending on digital assets, popularity, demand, trends, etc. is a few reasons. Moreover, many artists, musicians, and gamers choose this segment because they get to socialize, interact, network, and engage with many communities. The ownership associated also plays a significant growth in the progress. Many youngsters are known for investing in these platforms to earn more at a young age. It holds a share ranging between 70% to 80%.

Non-fungible Token (NFT) Market Segmentation: Regional Analysis

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

Based on region, North America is the largest growing. This is due to variables such as a developed economy, the existence of significant companies, awareness, demand, the presence of artists, and technology improvements, all of which aid in income generation. This accounts for 43% of the market. The top two leading regions in this industry are the United States and Canada. As per a report, unlike other platforms, OpenSea, an American firm, does not charge a fee to mint NFTs. It imposes a fee based on the final sale price which is set at 2.5% of the transaction value. Plans like these contribute to the victory of this region. With a total share of roughly 19%, Asia Pacific is the fastest-expanding region. China, Japan, and South Korea are a few companies at the forefront of this trend. Rising investments and potential, awareness, research activities, an expanding economy, technical breakthroughs, and innovations are the primary drivers of this sector's enormous expansion.

COVID-19 Impact Analysis on the Global Non-fungible Token (NFT) Market:

The pandemic was beneficial to the market. The new normal was lockdown, social isolation, and mobility restrictions. Due to uncertainty, economic downfall, and budget restrictions a lot of companies underwent layoffs. People lost their jobs and were confined to their houses. This caused a shift towards digital transformation. People started to make money remotely. This platform offered a lot of ways to earn high figures. An increased number of users signed up for this. Reports suggested that the P2E model generated around 776 million in the third quarter of 2021 and Axie Game gained significant popularity. Moreover, boredom encouraged a lot to try new things and acquire expertise in various blockchain technologies.

Latest Trends/ Developments:

The companies in this market are motivated to achieve a higher market share by implementing different strategies, such as acquisitions, partnerships, and investments. Companies are also spending heftily to improve existing formulations alongside maintaining competitive pricing. This has further resulted in increased government engagement and further enlargement.

Education, broader involvement, community engagement, integration with end-user industries, R&D activities, technological improvements and advancements, and upsurge in various applications like arts and collectibles are being incorporated and implemented in this market to elevate performance and generate considerable profits.

Key Players:

1. OpenSea

2. Rarible

3. CryptoKitties

4. Nifty Gateway

5. Decentraland

6. YellowHeart

7. SuperRare

8. Enjin

9. Axie Infinity

10. Worldwide Asset eXchange (WAX)

In March 2021, Beeple (Mike Winkelmann), a digital artist, made waves when he teamed with Christie's, one of the world's biggest auction houses, to sell a digital artwork named "Everyday: The First 5000 Days" as an NFT. The auction garnered a record-breaking $69 million, marking a watershed moment for NFT art in the traditional art market.

In October 2020, NBA Top Shot, an officially licensed NFT platform that lets fans buy, sell, and exchange legally licensed NBA collectible highlights, was created in collaboration with Dapper Labs. This partnership introduced NFTs to a wider sporting audience.