As the momentum around non-fungible tokens (NFTs) continues to build, a research report conducted by Marketsandmarkets claims that the NFT market will grow 35% annually to $13.6 billion by 2027. Currently, the market is estimated at $3 billion.
A report on the potential of the NFT market
A recent report by research firm Marketsandmarkets has highlighted the various factors that may contribute to the growth of the non-fungible token (NFT) market.
In the report, titled “Non-Fungible Tokens Market by Offering, End-user, Region – Global forecast to 2027,” the research firm states that the size of this market could increase significantly by 35% per year, and that it would represent $13.6 billion by 2027 (while currently it is estimated at only $3 billion). This increase will only be effective if investor interest continues to grow in parallel of course.
The report highlights the main factors that will contribute to the growth of NFTs. The democratization of the ecosystem is due to the increasing involvement of celebrities and influencers from all walks of life, the communities gravitating around video games as well as the ever increasing demand for digital art.
But more notable, MarketsandMarkets’ report considers other factors such as the many use cases in supply chain management, retail and fashion. Tech giants like Meta are also currently focusing on the metaverse, and that universe will rely in part on non-fungible tokens.
A new and fast growing market
This report is great news for investors as the NFT market is currently experiencing a slowdown, as evidenced by the decline in Google searches around the term. This is a new market that will continue to grow, but after growing 21,350% in 2021, it seemed logical that this trend would decline from the beginning of 2022.
The main factors developed in the research report have allowed non-fungible tokens to achieve a high level of notoriety in recent years, and especially in the last year with the increased adoption of NFTs by influential celebrities in different fields, or even sports teams or competitions.
For example, Elon Musk recently changed his Twitter profile picture to a collage of several popular NFTs from the Bored Apes Yacht Club (BAYC) collection. This simple temporary change of Musk’s profile picture resulted in the floor price of the NFT collection increasing by 10 ethers (ETH). This shows just how influential celebrities are in the expansion of this market.
But with a new market comes new risks. Many countries have started to introduce laws for crypto-currencies and non-fungible tokens, however some ill-intentioned people are taking advantage of the legal vagueness and lack of consumer protection to run large-scale scams. Recently, a hacker stole $3 million worth of Bored Ape NFTs.
To avoid scams, many crypto sites that are well known to investors are starting to open their own NFT marketplaces. This is notably the case of the crypto exchange platform Coinbase, or even Binance. These “marketplaces” allow investors to buy and sell NFTs in a secure manner. And all this should also contribute to the development of the NFT ecosystem.
In any case, if many celebrities adhere to the non-fungible token movement, and their usefulness in the economy becomes relevant, there is no doubt that we will witness a democratization of this ecosystem which is still in its infancy.