I want to describe what an NFT is before we talk about the NFT market.
Non-fungible tokens (NFTs) are digital assets that are based on a blockchain. The blockchain acts as a public ledger, allowing anyone to verify the authenticity and ownership of the assets. An NFT has a unique digital signature, meaning it is one of a kind, not like most digital items which can be mass-produced.
Cryptocurrencies and fiat are commonly used to buy NFTs, which are recorded on a blockchain. NFTs are viewable by anyone, but the buyer owns them. NFTs can be digital items like images, videos, collectibles, land in virtual worlds, music, text, as well as tweets.
Evolving market in 2022
All the crypto projects have started to roll out their own NFTs to attract users into their fold. NFTs have ruled 2021 and will become a game-changer for the adoption of crypto across the world.
Among the successful projects that made this possible are CryptoKitties, CryptoPunks, Bored Apes, ETH Stone, Hashmasks, and Decentraland.
Several of these NFTs was sold for over a million dollars under the aegis of one of the world’s largest auctioneers, Christie’s, Sotheby’s auctions, to name a few.
In 2022, NFTs will establish an industry that will allow all artists to sell their work to buyers around the world. At present, the majority of NFTs are based on the Ethereum protocol. However, in 2022, we will see NFTs rolled out on other protocols like Klever Chain too.
Klever NFT Marketplace will also be launched soon providing an alternative to OpenSea and other NFT Marketplaces.
According to a market tracker, DappRadar, sales volumes of non-fungible tokens (NFTs) surged to $10.7 billion in the third quarter of 2021, up more than eightfold from the previous quarter, as holding crypto assets reached new highs.
Impact of COVID-19 on the global NFT market
People all over the world have been forced to stay indoors due to regular lockdowns caused by the COVID-19 pandemic. All such populations, regardless of their age or origin, have been forced to find alternative forms of social interaction and, so, have been exposed to NFTs through virtual communities. These NFTs have a monetary value, so people started investing in them, and they will do so in 2022 as well.
With just $338 million in transaction volume in 2020, the global collectibles market including arts, painting, cars, toys, antiques, and more is a $370 billion market.
In light of these statistics, now is the perfect time to invest, as the global market for NFTs is expected to grow 1000-fold in the next ten years.
Currently, NFT transactions are dominated by retail traders, with the vast majority being valued below $10,000. But there are also some large transactions that are gaining ground.
Rise of insurance in NFTs
Despite the new, volatile, and unregulated nature of NFTs, insurance companies are weighing the risks against the opportunities to capitalize on the fastest-growing new lucrative financial tool.
NFTs tend to be very popular among the younger generation, and given the role insurance plays when it comes to the risk of loss, NFT holders can provide new potential customers.
In 2022, it will be the millennials and Z generations that will drive the NFTs market. However, one has to take a Klever decision to select NFTs, as there are scores claiming to be rare.