It has been nothing short of an amazing year for non-fungible tokens (NFTs). These assets, which have been around for a while, got what many will call a big break in 2021, and they haven’t looked back since.
Even with the market downturn that came in 2021, NFT trading volumes have continued to stay on a hot streak. Now, these tokens have comfortably set a new record.
Big Numbers for the Growing Sub-Industry
According to data from tracking source DAppRadar, the global sales of NFTs crossed $11 billion in the third quarter of 2021. The data marked the first time that trading volumes would soar so high, showing that adoption of NFTshas continued to jump across all blockchains.
Breaking down the surge in NFT volumes, Scott Galloway - a notable investor and business strategy expert - explained that global NFT sales had seen perhaps their biggest jump in the first quarter of the year. Sales increased by 24 times, moving from $53 million in Q4 2020 to $1.2 billion in Q1 2021.
Galloway shared his vision for the future of the NFT industry, arguing that these tokens can definitely stand the test of time.
“I would argue that NFTs may endure. If you have one of only 200 signed Picasso paintings, that signals your worth. It signals that you’re an artisan, and it signals that you have resources; things we all want to express to other people, which makes us feel powerful and more attractive,” Galloway said.
The crypto expert added that besides their ability to help people signal or make a point, NFTs could also be a store of value. With instinct playing a role in the value of all assets, there isn’t much stopping NFTs from continuing their bullish run.
Store of Value, Impressive Outreach Medium
Galloway definitely makes a solid point. NFTs can serve as a store of value, with many people buying these tokens as a means of preserving their wealth. Just as you would buy a painting or another work of art for wealth preservation purposes, NFTs fill the same role. Anyone can purchase an NFT representing an artwork and resell it over time at an even higher price.
As for the point of NFTs continuing their rise, many people have their opinions. NFTs have proven to be pretty volatile, and not many people particularly know what they are and why they’re so valuable. There is also the fact that market performances tend to affect NFT sales - if people are making money from crypto and the market is on a bullish run, they will be more willing to purchase NFTs.
The growth of NFTs is also due in large part to the influx of celebrity and brand endorsements. Artists, musicians, and top brands have all gotten into the NFT game as they hope to reach more people. It might be a simple case of jumping on the bandwagon, but it has helped increase the NFT industry.
A War of The Chains
Galloway isn’t the only person who has strong hopes for the NFT market. David Schwarz, the technical lead at Ripple Labs, explained earlier this month that the NFT market will broaden significantly over time.
Speaking with industry news sources, Schwarz explained that NFTs are still quite limited in how they function. Most people still use them for art and collectibles, as these are the industries where NFTs shine the most. But, the market should grow over time.
Schwarz pointed out that Ripple appears to have come late into the market. But, they’ve seen the potential for NFTs and are now making massive investments in the space. The company launched a $250 million creators fund in September, empowering NFT projects and creators that would like to launch on the XRP Ledger. Ripple Labs has also invested in Mintable - an NFT marketplace and minting platform.
The CTO also added that Ripple plans to use its XRP Ledger to challenge Ethereum for dominance in the NFT market. Ethereum has been the go-to choice for most NFT platforms, with most of them launching on the blockchain. Ripple hopes to eventually challenge this title, although they understand that there are significant challenges on the way.
Competing blockchains are everywhere. Solana is the clear frontrunner, with Raj Gokal - co-founder of Solana Labs - claiming recently that 2.2 million NFTs had been minted on the blockchain in the past few months. The Cardano blockchain is also emerging as a formidable competitor, following the addition of smart contracts to the chain back in September.
Ripple Labs definitely has its work cut out for it. But, the company itself is one of the most valuable blockchain firms. Its considerable resources will come in handy as it looks to lure more developers and NFT projects.