Since the start of 2020, a 214% increase in unique new users have entered the NFT market, primarily active in the NFT Art and NFT Gaming Sectors both of which have brought in a combined ~$100million into the industry.
To put the sheer growth of the NFT market into perspective, the NFT market growth has outperformed Bitcoin in 2020, which saw 185% growth in 2020.
Pioneered in 2017, NFT’s function as a proof of ownership and authenticity, allowing artists and gamers to securely own, monetize and trade their work.
Central to NFT’s is ‘non-fungibility’, an asset characteristic comprised of uniqueness, rarity and indivisibility. Assets that possess such qualities include art, collectibles and games.
At present, there are at least 73 NFT projects operating throughout the industry.
This year, the two biggest sectors within the NFT industry have been art and gaming. The powerhouses within the NFT art market include Sorare, Superare and Nifty Gateway.
Both Sorare and Superrare experienced the highest volume of art traded on their platforms in November, $1.5million and $1.3million respectively.
However, in 2020 it was NiftyGateway that grabbed the headlines, with $3.5million worth of art sold in a single 24-hour auction this month – the largest single art sale in NFT history.
The second major contributor to the growth of the NFT industry in 2020 has been the explosion of blockchain-based games. The most notable project in 2020 has been the blockchain-based pet game Axie Infinity.
Key to this success have been two high-profile trades made on the platform worth $83,000 and $134,000.
The Future of NFT’s
Ironically, the continuation of the Covid 19 pandemic may very well be boosting sales through the NFT industry.
Additionally, with museums and galleries closed, sales of physical art has fallen by as much as 36% in 2020. Conversely, NFT-based digital art has risen meteorically.
The success of the NFT market has not gone unnoticed, gaining traction with some of the world’s largest institutions.
On the 13th of December, Microsoft and Big Four firm Ernst & Young announced the expansion of Microsoft’s blockchain-based solution to extend to gaming rights and royalties management via NFT-based tokenization mechanisms.
Going into 2021, the NFT market looks set to grow over the next 12 months, with the crypto analytics company Interdax, estimating that the NFT market could reach a valuation of $1billion by the end of 2021.