Non-Fungible Token (NFT) Market

Non-Fungible Token (NFT) Market Outlook (2022-2032)

The global non-fungible token (NFT) market witnessed soaring growth in 2021 with worldwide revenue up 27,759% year-over-year. Worldwide revenue from non-fungible tokens is predicted to grow nearly 12X by 2032, reaching a market valuation of US$ 316.7 billion.

Report Attributes	Details
Non-Fungible Token (NFT) Market Size (2021A)	US$ 27.1 Billion
Estimated Market Value (2022E)	US$ 34 Billion
Forecasted Market Value (2032F)	US$ 316.7 Billion
Global Market Growth Rate (2022-2032)	25% CAGR
Americas Market Share (2021)	~23.7%
Asia Pacific Market Growth Rate (2022-2032)	~15.7% CAGR
United States Market Growth Rate (2022-2032)	~35.8% CAGR
Market Share of Top 5 Companies	~26.7%
Key Companies Profiled	Art Blocks Axie Infinity Cloudflare, Inc. CryptoKitties Dapper Labs, Inc. Dolphin Entertainment, Inc. Foundation Funko Gemini Trust Company, LLC. Onchain Labs, Inc. OpenSea Ozone Networks, Inc. PLBY Group, Inc. Rarible Semidot Infotech Takung Art Co., Ltd. The Sandbox YellowHeart, LLC.

Sales Analysis of Non-Fungible Tokens (2017-2021) Vs. Market Forecast Outlook (2022-2032)

Distributed ledger technologies (DLTs) – Blockchain - is a new type of technology that is posing a threat to traditional business practices. Previous business models relied on expensive and sluggish intermediaries to build confidence between two parties who don't trust each other.

Advancements in DLTs led to the creation of concepts that could simplify and reduce the cost of exchanging value. Through a distributed ledger, the value is represented by the tokenization of nearly everything, including physical as well as digital assets.

Non-fungible tokens are cryptographic tokens that represent a one-of-a-kind technology. Sneakers, commercial real estate, art, in-game items for online games, university degrees, or a plane ticket are some examples of NFT, which can be physical or digital.

NFTs let owners of one-of-a-kind things confirm their authenticity and ownership. Owing to the NFT’s unique IDs, which match up with either the service that does authenticity checks or the original issuer of the item, resulting of individuals or businesses buying and selling products in a marketplace, is increasing at a dramatic rate.

• Short Term (2022 Q2 to 2025): Significant utilization of NFT in collectibles sectors to positively impact non-fungible token market growth.
• Medium Term (2025-2028): Asia Pacific anticipated to witness high demand for non-fungible tokens from several end-use sectors, fueled by favorable government initiatives.
• Long Term (2028-2032): Rise of NFT companies that offer better performance and lower fees will increase demand for NFTs, exponentially.

During the years 2017-2021, the global NFT market registered a CAGR of 652.1%, and according to the analysis by Fact.MR, a market research and competitive intelligence provider, the market is projected to exhibit growth at 25% CAGR through 2032.

Market share analysis of asset type and region is provided in the above image. Under the asset type segment, digital assets dominate the market with 75.1% market share in 2022.

Why is the Non-Fungible Token Market Soaring?

“Global Internet & Smart Device Penetration Driving NFT Market Growth”

As the development of high-speed network connections surges across the world, the smart connected devices market will gain a boost and will reach a new high. As of 2021, there were 5 billion Internet users in the world, accounting for 63% of the world’s population share.

All of this is being driven by increased global demand for smartphones, laptops, tablets, and bring-your-own-devices across institutions and commercial workplaces. Owing to this, developments in Blockchain technologies are projected to increase demand for non-fungible tokens.

After 2014, when the first NFT was created, 1000s of NFTs take place every day and 250,000 people trade NFTs every month. This is expected to grow at a dramatic rate over the assessment period and will drive the growth of the non-fungible token industry.

“Physical & Digital Collectibles NFT – The Talk of the Town”

The NFT market started less than 5 years ago and has experienced extremely strong growth since its outset. NFTs are being utilized to create an entirely new class of collectibles, as seen in CryptoKitties, where it is now possible to buy the tokenized version of a beloved sports star or celebrity. It is assisting traditional collectors who want to tokenize their stamps, coins, or baseball cards.

Many platforms allow for the tokenization of physical or digital accessories. Advanced services are used by the platform to create non-fungible tokens and translate a digital identity into tangible tags that a product owner can keep or transfer.

The collectibles segment is subject to strong fluctuations, with regular peaks in the average price of between US$ 5,000 and US$ 10,000 in 2020.

How is Non-Fungible Token Market Growth Being Hampered?

“Government Regulations & Lack of Technology Infrastructure”

NFTs have different legal frameworks depending on the jurisdiction. One of the few points of commonality is the separation of cryptocurrency and non-fungible token legislation. There is no clear legislation regarding the assets that underpin an NFT.

Some countries equate Blockchain games with chance games, while others associate them with strategy games. Owing to these legislative disparities, user protection by different projects is difficult to implement. Regulation of the NFT market may prove to be one of the greatest challenges in the years to come.

Moreover, there is a digital divide, not only among nations but also between national populations. More than 50% of the global population is offline and the digital divide affects 52% of women and 42% of men, worldwide.

Country-wise Insights

Why is Demand for Non-Fungible Tokens Soaring in the U.S.?

The United States NFT market, currently estimated at US$ 5.2 billion, is expected to reach US$ 112 billion by 2032.

The United States has one of the largest digital infrastructure systems in the world. The country is home to approximately 42% of NFT companies in the world. New U.S. Securities and Exchange Commission (SEC) regulations for NFT trade, which will allow services in the United States to extend further, will be a positive transition for the NFT market in the country.

In the United States, as a result of the integration of the use of credit cards to buy NFTs and the promotion of major brands, the number of active wallets soared in 2021. Owing to this, the United States NFT market is expected to create an absolute dollar opportunity of US$ 106.7 billion over the assessment period.

How is the China Non-Fungible Token Market Evolving?

Digital technology and electronic device penetration rates are overwhelmingly high in China. Owing to this, the China non-fungible token market is growing at a fast rate to meet this increasing demand.

There are two major trends in China’s NFT market - the growing number of large Internet companies and the proliferation of NFT start-ups entering the market. This is due to China’s tech giants having a fear of missing out (FOMO) on NFTs.

China is expected to reach a market valuation of US$ 8.5 billion in 2022. This has proved to be an opportunity for non-fungible token companies to enter the local markets with advanced service offerings for NFT end users.

Category-wise Insights

Which Asset Type is Likely to Exhibit High Growth in the Market?

Digital asset NFTs have increased dynamically in recent years, surpassing US$ 20.2 billion in 2021. In the previous four years, the digital NFT segment grew by a mammoth 3,285X, and Fact.MR’s optimistic prediction shows that by 2032, this will be close to 13X.

Day by day, the creation of digital assets is increasing at a significant pace. Owing to this, digital asset NFTs have been identified as being offered by a variety of non-fungible token companies across the world.

Transactions that happened on digital platforms have increased dramatically with a Y-o-Y increase of 27,951.8% between 2020 and 2021. Furthermore, the COVID-19 pandemic has had a significant impact on the digital assets of NFTs, thereby driving NFT market expansion.

Why is the Artwork Category Crucial in this Space?

The artwork sub-segment is gaining attention huge attention in this market. As market requirements are dynamically changing for art workers, NFT has enabled the transition of the artwork category. The artwork sub-segment has become a vital component for the non-fungible token market with 1,639,782 volumes of artwork & circulation of assets identified.

However, there is rising demand for the artwork category of non-fungible tokens that provide personal non-fungible token rights. In artwork NFTs, a part of the work is recorded on the Blockchain as Crypto Art and secures the identity and ownership rights.

The artwork category of NFT is likely to account for a market valuation of US$ 7 billion in 2022 and grow 11X over the forecast period.

Competitive Landscape

Prominent non-fungible token market players are Art Blocks, Axie Infinity, Cloudflare Inc., CryptoKitties, Dapper Labs Inc., Dolphin Entertainment Inc., Foundation, Funko, Gemini Trust Company LLC., Onchain Labs Inc., OpenSea, Ozone Networks Inc., PLBY Group Inc., Rarible, Semidot Infotech, Takung Art Co. Ltd., The Sandbox, and YellowHeart LLC.

In the non-fungible token business, prominent companies employ a competitive market fee strategy along with better performance. Companies are forming cooperative relationships with government agencies and other institutions.

Moreover, companies are helping developers who have difficulty in building Blockchain infrastructure to connect their desired digital items or assets with simple system integration. Non-fungible token companies are extending their offerings due to the high demand from diverse end users, such as from gaming to artwork.

For instance :

• In April 2021, Cloudflare introduced a new API that takes an ERC-721 token ID and contact address and sets it on a video. This way, every video on stream can be represented with an NFT.
• In Nov. 2021, Dolphin Entertainment announced the launch of Creature Chronicles: Exiled Aliens, the content studio's first generative NFT collection.
• In June 2022, Hong Kong-based Animoca Brands, which invests in non-fungible tokens and Metaverse projects, put in over US$ 1.5 billion across more than 340 investments.

Fact.MR has provided detailed information about the price points of key non-fungible token companies positioned across regions, sales growth, and speculative technological expansion, in the recently published report.

Non-Fungible Token Industry Research by Category

• NFT Market by Asset Type :

  • Physical Assets
  • Digital Assets
  • Metadata

• NFT Market by Category :

  • Artwork
  • Collectibles
  • Domain Names
  • Gaming 
  • Identity 
  • Memes
  • Metaverse
  • Music and Media
  • Real-world Assets
  • Sport Items
  • Tickets
  • Virtual items
  • Others

• NFT Market by End Use :

  • Personal
  • Commercial

• NFT Market by Region :

  • Americas
  • EMEA
  • Asia Pacific