Market Analysis (NFT Market Analysis)
The virtual reality market that utilizes 3D data such as metaverse, VR, and AR is growing rapidly. In particular, after the 2020 corona pandemic, the market is growing explosively. According to research by Researchandmarket.com, the metaverse market, which will reach 33 trillion won in service sales in 2021, is expected to grow tenfold in 2024.
AR and VR market size worldwide, Source: PwC(PricewaterhouseCoopers)
In addition, the NFT market is also growing rapidly from 2020.
According to NFT research firm NonFungible, NFT transactions quadrupled from about $62 million in 2019 to about $250 million in 2020.
In particular, in the first quarter of 2021, the market is growing literally explosively, increasing by 131 times compared to the same quarter of the previous year.
The background to this is that the number of art transactions through NFT has increased significantly.
As the creation time, transaction frequency, owner, transaction price, etc. of works are transparently disclosed, information asymmetry has been resolved as well as incidental costs such as brokerage fees, taxes, transportation costs, appraisal fees, and insurance premiums incurred in the purchase process of artworks are eliminated and has been greatly reduced.
In addition, the market is growing rapidly with the advantages of no maintenance and easy secondary transactions.
Quarterly size of the NFT market, Source: DappRadar, Mirae Asset Securities Research Center
The NFT game market is also growing rapidly.
The market is blooming as NFT-based P2E games such as Exi Infinity begin to gain popularity in earnest in 2021. In P2E games, economic value can be created rather than simply enjoying the game.
Because of these characteristics, the market is expanding as many people join the game for the purpose of making money rather than enjoying the game.
Exi Infinity, a globally popular P2E game, recorded a transaction volume of $2 billion in the third quarter alone.
NFT is the core of realizing Metaverse
The reason why the metaverse and the NFT market are closely related is that economic activity takes place within the metaverse, creating a huge market.
Since Metaverse is a service that has no borders, it has limitations in using each country’s currency.
We need a currency that is not based on the credit of a specific country or company and that can be used in the real world.
In other words, it becomes important to prove ownership of assets within the metaverse.
NFTs guarantee ownership of assets because they can prove ownership in the blockchain network, even if there is a problem with the creditworthiness of a company or country.
And, in order to maintain such an asset, above all else, it is a time when the operation processing method of the block chain token is required.
NFT Market Analysis
As mentioned earlier, the NFT market is expanding not only to collectibles, but also to various fields such as games and metaverses, and as the NFT market is rapidly growing, various companies are interested.
Global NFT market cap was more than $2.5 billion as of the end of April 2021, about seven times higher than the market capitalization of about $330 million as of December 2020.
In August 2021, OpenSea, the world’s largest NFT exchange, had a transaction value of about $3.4 billion, and the total transaction value of all NFT exchanges in the third quarter of 2021 exceeded $10 billion.
NFT Market capitalization, Source: statista & DappRader
In particular, the collectibles sector is the most actively traded, with high expectations for price increases due to possessiveness due to limited issuance.
CryptoPunks, a popular collectibles project, have an average price of over $500,000 already.
In addition, in the field of game and entertainment, where intellectual property rights are important, NFT-related businesses are announcing one after another because content can be digitized through NFT.
Businesses where content is important are focused on a new business model because they can publish their own content as NFTs to prevent unauthorized duplication or theft, and to resolve imbalances with distributors by expanding profits to original authors.
In the metaverse industry, interest in NFT technology is also being focused.
The expectation that a ‘complete virtual economy’ can be reached by linking the virtual economy and reality is driving growth by issuing all assets in the metaverse as NFTs, enabling proof of transaction and ownership.
In fact, it can be seen that the number of active wallets in the third quarter of 2021 increased the most to 7.13% in the metaverse field.
In addition to existing virtual asset exchanges and block chain companies, big tech companies are entering the NFT business and expanding their scope.
In fact, Facebook announced in October that it would change the company name to Meta, build a metaverse platform, and support online economic activities using NFTs.
In addition, Kakao announced plans to provide a variety of services such as NFT issuance, trading, and social network services based on the blockchain platform Klaytn developed by its subsidiary Ground X.
NFT Exchange launched “LINE Blockchain NFT Market Beta”.
The growth of the NFT industry is also showing a movement to provide various financial services secured by NFT as collateral by domestic and foreign financial companies.
Large banks such as US Bank and BNY Mellon have included NFTs in their digital asset custody services, and Visa uses its global pool of merchants to discover companies with intellectual property rights, support the issuance of NFTs, announced plans to make it possible to purchase NFTs through Visa cards in the future.
GoldmanSachs announced that it is preparing an exchange-traded fund for blockchain technology-related companies such as NFTs and DeFi
