Spending on NFTs to cross $40b

Reuters file photo

In Q2 2022 as of May 1, 491,000 addresses have transacted with NFTs, putting the NFT market on pace to continue its quarterly growth trend in a number of participants.

Published: Mon 23 May 2022, 11:00 PM

Updated: Fri 17 Jun 2022, 6:53 PM

By
Sandhya D'Mello

The popularity of non-fungible tokens (NFTs) clearly skyrocketed last year and spending through 2022 is on track to reach all-time highs, according to research from Chainalysis, the blockchain data platform.

The report found collectors have sent over $37 billion to NFT marketplaces in 2022 as of May 1, putting them on pace to beat the total of $40 billion sent in 2021.

“NFTs have been one of the most dynamic and prominent parts of Web3 over the last two years,” said Ethan McMahon, Economist at Chainalysis.

“To a large extent, the current excitement around NFTs stems from their utilisation in buying and trading digital art. But the potential of this technology is far greater as it can be used to not only give the holder ownership over the digital data, or media associated with the token, but also real-world assets.”

As the popularity of NFTs continues to grow, so too has the number of active NFT buyers and sellers. In Q1 2022, 950,000 unique addresses bought or sold an NFT, up from 627,000 in Q4 2021. Overall, the number of active NFT buyers and sellers has increased every quarter since Q2 2020. In Q2 2022 as of May 1, 491,000 addresses have transacted with NFTs, putting the NFT market on pace to continue its quarterly growth trend in a number of participants.

The report went on to analyse the monthly share of internet traffic to NFT marketplaces by geography which revealed that while some regions are more active than others, the fact that no region has made up more than 40 per cent of all web traffic since the beginning of 2021 suggests that, like cryptocurrency as a whole, NFTs have captured a global audience. In the Middle East, web traffic to NFT marketplaces spiked in mid-2021 and has since stabilised, accounting for around 5 per cent of total global traffic.

By analysing trends in transaction size, the research from Chainalysis also shed light on who’s investing in and collecting NFTs. “While there have been some significant monthly fluctuations, for the most part we see that NFT collectors — with a transaction size between US$10,000 to US$100,000 — make up the bulk of activity. Institutional investors — those with transaction values greater than US$100,000 — are, however, nipping at their heels, and even make up the majority of activity in certain weeks when extremely large purchases have been made,” said McMahon.

Dubai becomes NFT hub

Recently, Dubai’s Museum of the Future has entered into a collaboration with Binance NFT, the NFT marketplace of Binance, the world’s leading blockchain and cryptocurrency infrastructure provider. Through this collaboration, the Museum aims to develop and launch a range of digital products on the blockchain, starting with their first-ever NFT collection – The Most Beautiful NFTs in the Metaverse.

Omar bin Sultan Al Olama, UAE Minister of State for Artificial Intelligence, Digital Economy, and Teleworking Applications, said, “Museum of the Future’s partnership with the world’s largest cryptocurrency and blockchain ecosystem player makes a significant contribution towards Dubai’s plans to establish a new international digital asset ecosystem, which will, in turn, generate long-term economic growth within the digital economy.”

Lath Carlson, executive director of Museum of the Future, said, “This exciting project is the first of many future ventures that will see us working with the world’s brightest minds and construct high-impact developments that will shape the future.”

The Museum of the Future is developing a range of virtual assets and will pioneer development in the crypto-technology space. The first NFT drop is set to be announced in the coming weeks, with the collection to be intrinsically linked to ‘The Most Beautiful Building on Earth’, aiming to set new standards for NFTs worldwide.

Similarly, BEDU, the Dubai-based leader of Metaverse and Web3 technologies in the Middle East, and Omada, the leading performance-based digital marketing and eCommerce advertising group in the Mena, announced a partnership to jointly develop and deploy an NFT-based eCommerce marketing solution.

Misha Hanin, co-founder & executive board member, Futurist at BEDU, said: “This powerful connection between our advanced Web3 and NFT technology and Omada’s leading-edge eCommerce and digital-marketing platforms is a gamechanger in the current eCommerce landscape and has the potential to impact multiple industries, from membership and loyalty programs to personalised marketing and beyond.” — sandhya@khaleejtimes.com