The abbreviation NFT is becoming one of the most discussed topics in the world not only among crypto enthusiasts but also among teenagers, students, and even elderly people. Individuals have started realizing that the NFT market has already accumulated millions of USD and there is a high possibility that this figure will continue increasing thereby exceeding the state budgets of some developed European countries.
However, due to the unprecedentedly fast growth of the NFT market, many people including crypto professionals, do not exactly know what NFTs are and what the factors are behind the NFT boom. So, let’s start diving into the current state of the NFT industry.
NFT Boom 2.0: Is There Any Proof?
The first massive explosion of the NFT popularity was observed in February and March 2021. The average daily volume of NFT sales reached more than $19 million, according to nonfungible.com. At that time, almost every crypto enthusiast started hearing active discussions about NFTs. The NFT sale figures observed in March 2021 were treated by industry enthusiasts as a real boom, but there were sceptics who strongly considered that the NFT market is overheated. Of course, after rapid growth in Q1 2021, there was some kind of correction in the NFT market that was also referred to as cooling. The sale volumes decreased to a few million USD per day. However, the industry needed this cooling to prepare for…
Of course, one may argue that sale volumes are not the best indicator of the market boom since, for example, a single deal may make for the whole volume. That is why let’s look at the daily number of sales. In August 2021, on average, the daily number of sales has been 2 times higher than for any period in the first half of 2021. In August 2021, this figure has been constantly above 5K while for the whole first half of 2021, there were only a few days
when this figure exceeded this level.
Generally, in all segments and by all indicators, the state of the NFT market in August 2021 is 2+ times stronger than in March 2021. That is why we call this very hot period the NFT boom 2.0.
The Factors Behind the Current NFT Boom
One of the key factors behind the strong popularity of NFTs among investors and art lovers is the possibility to make huge money. For example, in March 2021, digital artist Mike “Beeple” Winkelmann sold his NFT called Everydays – The First 5000 Days for $69 mln. In August 2021, the top NFT sales price has been above a few million USD. For example, the recent NFTs created by CryptoPunks and ArtBlocks have been sold for more than $1 mln. People make real money by working with NFTs and it’s a proven fact.
The second factor boosting the popularity of NFTs is that they revolutionize the sphere of art. Artists, as well as collectors, have been strongly interested in meeting innovations in the sphere of art since this field has been developing in a traditional way for decades or even centuries. That is why all parties consider NFTs as a new great opportunity that can make art accessible to everyone. Like with every revolutionary solution, the first ones to accept and use it are likely to get the highest returns in case of its successful implementation. Thus, we can observe a real race among crypto enthusiasts and art lovers: everyone wants to be an NFT pioneer.
And the third factor that has emerged quite recently is the support from the side of large institutional players. For example, in the middle of August 2021, the payment giant VISA purchased the piece of art created by CryptoPunks for $150,000. The deal has been facilitated by the newly licensed bank Anchorage. As a result, the NFT market players have objective reasons to believe that mass NFT adoption can take place in the coming future.
And, of course, we should not forget about digitization. The average amount of time spent by people online doubled in 2020. In this way, the NFT boom may be considered a natural long-lasting trend. Such spheres as music, sport, and fashion are becoming increasingly digitized and NFTs are only facilitating this transformation. Consequently, the current NFT boom is not a phenomenon but rather a logical consequence of the recent technological changes that have taken place worldwide.
The Place of New Projects in the NFT Boom
In August 2021, the global NFT community saw a lot of news about the launch of innovative NFT solutions to meet the needs of artists and collectors as well as other market players. Such new projects as ArtWallet, Epik, Piñazza Piñas, vEmpire, and others are some of the most expected NFT projects to be launched by the end of 2021.
As we can see from their websites and social media pages, all these projects, except ArtWallet, are focused on gamification of NFTs while ArtWallet is the solution aimed at ensuring fair rules of the game for artists and creators in the digital art world. The core teams behind these projects have realized the potential the NFT boom has created for them and that is why the launches are planned for the coming period.
One of these projects, ArtWallet, was initially planned to be launched at the beginning of Summer, however, due to the cooling observed in the NFT industry during this period, the project’s team has decided to reschedule the launch. The situation around ArtWallet demonstrates how strongly NFT projects depend on market trends.
When we look at the founders of the NFT projects, we can see that highly reputable industry leaders shift their attention to NFT. For example, the former Art Director for Nickelodeon Animation Studios Michael Lennicx developed the concept behind Pinazza, and the founding member of the MetaMask wallet Joel Dietz is the founder of ArtWallet. Thus, we can make a logical conclusion that new NFT projects are led by professionals, not by amateurs.
Also, when looking at the goals set by these projects, we can see that they are focused on addressing real issues existing in the modern NFT industry or creating value for common people. For example, ArtWallet addresses the key challenges existing in the global NFT industry such as data persistence, hardware integration, protection against security threats, etc.
The other project, Piñazza Piñas, will donate $50K
to mental health charities at the end of the sale of its NFT token. New NFT projects realize that interesting texts and interactive marketing campaigns are not enough to achieve great success. Users and investors want to see real solutions behind great brand names. It’s a new NFT reality.
Generally, the NFT industry is experiencing an unprecedented boom. The NFT community is likely to face the entry of dozens or even hundreds of innovative projects in the coming months. That is why the level of competition will be very high and will bring many benefits to real art lovers. The projects like the ones listed above need to be prepared for this race and highly functional solutions are the main weapons at their disposal!