To Recap 2021 was the Year of the NFT

This year certainly came with its fair share of ups and downs. While last year the world practically came to a stop, 2021 showcased how we as a society can overcome and deal with these situations. While COVID is still ever-present in our daily lives, countries around the world have started to fight back with the distribution of several vaccines. Additionally, markets and countries have started to open up, allowing for people to go back to a somewhat normal life.

However, what has changed significantly is the general outlook on crypto and its acceptance into the mainstream. This year we saw Bitcoin reach an all-time high of $68,000 while another meme coin, Shiba Coin, gave Dogecoin a run for its money with its meteoric rise.

In my opinion, all that takes a backseat to this year’s hottest commodity, Non-fungible Tokens or NFTs. These tokens are unique as each token is its own thing altogether. You can trade 1 USD for another 1 USD and you have the same amount in your pocket. In the case of NFTs, once one is created it is not equivalent to another NFT, similar to trading cards. Although these tokens often come in the form of digital art, NFTs can essentially be anything as long as it is digital. While the tokens have had mixed reviews depending on who you ask, some say they’re a great way for artists to earn more revenue while others say it shouldn’t be considered art. There is something that cannot be denied, its value to the market.

Currently, the global NFT market is valued at around $22 billion as collections such as Bored Ape Yacht Club and Matrix avatars have become major investment assets. Data from DappRadar shows that the trading market for NFTs in 2020 was $100 million. The single most valuable token was sold this year for $69.3 million; a digital collage by the artist known as Beeple.

DappRadar notes that one of the key factors to the surge in NFT trading was the introduction of mainstream businesses entering the market.

“Hollywood, sports celebrities and big brands like Coca-Cola, Gucci, Nike, and Adidas, made their dent in the space, providing NFTs with a new level of exclusivity. The power of attraction of these famous names profoundly impacted NFTs and the blockchain industry overall,” said DappRadar.

To add to their point, Coca-Cola raised over $575,000 from selling their NFTs. While that may not seem like so much for a billion-dollar company, the raw value is not something that can be ignored.

In a more local setting, public figure, Heart Evangelista, came out with her own NFTs indicating that this is not just a phenomenon happening in fist world countries.

These tokens have also taken the Gaming industry by storm as play-to-earn games are mainly centered around NFTs. Axie Infinity, The Sandbox, and Decetraland are some figures in the industry that have enticed gamers to invest their time to make some extra revenue. Axie Infinity and Decentraland both have market capitalizations of over $5 billion, while The Sandbox is not far behind at $4.47 billion.

While NFTs have had major success this year, it is still worth noting that the market is quite young, and many investors do not know exactly what drives a specific tokens value up or down.

Analyst for research firm GlobalData, George Monaghan, has stated that:

“2021 NFT activity was frenzied. That’ll subside in coming years and NFTs will settle into something more akin to today’s modern art market, where consensus on value is more solid. That said, it’ll be years before any crypto market, let alone NFTs, comes to resemble anything conventional markets would call stable. I wouldn’t throw your rainy day fund into any meme NFTs quite yet,”

Source: The Verge, The Guardian, Coinmarketcap