After recording a boom in 2021, non-fungible tokens (NFTs) will continue to gain significant ground in 2022 and outperform cryptocurrencies. Back by popular artists and celebrities, NFT’s popularity will surely overrun crypto’s. Cryptocurrencies, vulnerable to high volatility, have suffered humungous losses in the past seven days.
According to Dune Analytics, the largest NFT marketplace – OpenSea saw its transaction volume on the Ethereum blockchain surpass $4 billion in the month of January. It has recorded its highest monthly volume in history.
Eric Chen, the Co-Founder of Injective, told Distributed Ledger in an interview that NFT, in general, is kind of uncorrelated with the greater digital asset space. The latest crypto market crash shows that it was following in the footsteps of the stocks. Cryptocurrencies have been facing macroeconomic uncertainties just like the stock market.
On the other hand, NFTs have been gaining mainstream attention. This has been driven by companies, celebrities and brands coming up with their own NFT collectibles. Some examples are Adidas, Nike and Macey’s, and the latest being Walmart – the giant retailer is looking at introducing NFTs, and Gap Inc. has already launched digital hoodie art NFT.
Paul Judge, a managing partner at Panoramic Ventures, acknowledged that awareness from mass-market brands is driving the fast adoption of non-fungible tokens. There are more newcomers and more activities per user in this space. The unique feature of NFTs is that they are collectible, which people can purchase and hold onto for quite some time. It can also be traded, similarly to the stock market.
Robert Zagotta, a chief executive at Bitstamp USA, said crypto exchanges and NFT marketplaces are also in some kind of a race. In October 2021, FTX launched a marketplace for Solana-based NFTs. Zagotta believes crypto exchanges have their own special places in this competition. He says if a user can do more than one thing on one platform, it reflects synergy and efficiency.