The 2021 bull run in the crypto markets will be mainly remembered for the incredible growth of the decentralised finance ecosystem (DeFi) and the simultaneous non-fungible token (NFT) boom. NFTs saw their popularity skyrocket to previously unseen levels. Mainstream investors flocked to get their hands on the next rare NFT avatar or digital artwork.
That said, we are left with a burning question – how will NFTs fare in the coming years? Should we expect this exponential growth to keep on or will interest in NFTs decline? In this article, we explore some examples that give us a bullish perspective and the strengths NFTs might capitalise on.
We will also provide an honest forecast about NFTs in 2022, which should give you a good idea of the upcoming prospects in this niche.
Illustration of NFT Boom: What It Looks Like
NFTs have come a long way, there’s no doubt about that. What started as a simple fad over digital collectibles quickly grew into a global phenomenon. And the rising prices of NFT art pieces certainly contributed to the popularity of this field. In the past year, entire communities have been created around NFTs. Projects such as the Bored Ape Yacht Club (BAYC) drew in celebrities and influencers, showing that an NFT can become a vehicle for exclusiveness.
This buzz around NFTs quickly translated into the real world through events and auctions. Let’s have a look at some of the most notable ones in 2021.
NFT.NYC is considered to be the “Super Bowl” of real-world NFT events. This community event is held in New York once a year, and 2021 was its third iteration. Notably, the 2021 event hosted more speakers than the event had attendees in 2019. This incredible expansion led to a much higher reach into the mainstream media.
NFT.NYC in November 2021 took over the steps of the iconic Times Square, with more than 5,000 people attending the event. Hundreds of brands were present, showing the growing interest in NFTs for the mainstream consumer. Celebrities like film director Quentin Tarantino and rapper Busta Rhymes also expressed their support for and belief in the future of NFTs.
While the event was a complete success, the organisers believe thatNFT.NYC will transcend its 2021 accomplishments in 2022. With hundreds of exclusive VIP and open events, the NFT community will gather once more this June, where multiple high-profile speakers are expected to make an appearance.
Auctions of Popular Artists and Projects in the NFT Space
Last year, the news was filled with incredible NFT auction headlines, where auction lots repeatedly one-upped each other. Billions of dollars were poured into NFT art, avatars and various other use cases. Some of the most notable ones were:
- Beeple’s “Everydays” collection sold for a record-breaking 38,525 ETH, which equates to $69,346,250. Christie’s showed the world that NFTs weren’t just a niche interest and this auction decidedly pushed NFTs into the mainstream.
- Various CryptoPunks sold for multi-million dollar figures. CryptoPunk #5822 and CryptoPunk #7523 reached the prices of 8,000 ETH and 4,300 ETH respectively, establishing them as some of the most coveted digital assets on the planet. This has pushed individuals interested in such assets to invest in Ethereum considerably.
- Bored Ape Yacht Club NFTs have been selling for a floor value of 100 ETH, with dozens of celebrities like Jimmy Fallon, Post Malone and Justin Bieber jumping on the hype train.
As you can see, the interest in digital art NFTs doesn’t seem to have a limit, with investors exchanging billions of dollars for these collectibles.
Fidenza Art Blocks and the Artistic Usage of the Blockchain
Tyler Hobbs writes code and creates NFT art. His Fidenza series of digital artworks are generated through an algorithm on the blockchain. In 2021, he released 999 pieces that sold out in mere minutes.
However, just a couple of months later his #313 piece was auctioned at 1,000 ETH on OpenSea, instantly propelling the artist to the forefront of the NFT landscape.
Benefits of NFTs
NFTs began empowering individuals through the benefits of decentralisation. They allowed artists to reach a larger public, without the red tape barriers and extra costs of intermediaries such as art galleries and curators.
At the same time, they provided collectors with an easily transferable digital asset that allowed them to store value and make incredible profits in short amounts of time. However, NFTs present additional advantages, including:
- Traceability and proof of origin – each NFT is unique and can be easily verified on the blockchain.
- Ease of transfer – because of their digital nature, NFTs can be seamlessly transferred from one user to another, at minimal cost.
- Utility – more than just collectibles, NFTs can provide exclusive access to blockchain functionalities, VIP clubs, etc.
To sum up, as these advantages are discovered by mainstream investors, NFTs should only grow in popularity in the future.
Forecast: NFT Development in 2022
More than 90% of the NFT market resides on Ethereum. This means that its upcoming upgrade to a proof-of-stake blockchain should considerably affect transaction speed and costs in a positive way. Moreover, eco-friendly blockchains with smart contract capability such as Solana, Tezos and the Binance Smart Chain are gaining traction. This leads us to believe that this niche will only grow in the future, and provide investors with an overall improved experience.
In 2021, NFTs spearheaded crypto-assets into the mainstream. While they were a niche asset in the past, today almost everyone has heard of NFTs. With their inevitable inclusion in upcoming metaverses, we foresee them gaining even more momentum in the coming years.