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The Non-Fungible Token (NFT) market is estimated to grow by USD 113,933.5 million at a CAGR of 35.02% between 2022 and 2027.
Major factors driving the Non-Fungible Token (NFT) market include increasing demand for digital art, growing investments in digital assets, and security and ownership of digital assets. Furthermore, the strategic initiatives implemented by vendors are creating a major impact in the market. For instance, in April 2022, OpenSea, one of the major vendors in the global NFT market, acquired NFT aggregator GEM.xyz. The acquisition will help OpenSea expand its product portfolio.
Start-up communities are preferring the NFT market since vendors are adopting aggressive acquisition strategies to expand their market presence in various segments which are expected to fuel the market growth altogether.
This report extensively covers market segmentation by application (collectibles, sports, arts, and others), end-user (personal and commercial), and geography (APAC, North America, South America, Europe, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The outbreak of COVID-19 in 2020 had a widespread impact on several countries in the region, including China, India, South Korea, and Japan. In response, governments in this area imposed complete lockdowns in March 2020 to curb the spread of the disease. This had a negative effect on the art and music industry, and as a result, people found various ways to support artists, leading to the growth of the digital art industry and the emergence of NFTs in the creative world. The increase in online market sales can be attributed, in part, to the limited opportunities to visit offline auction spaces. These factors had a positive impact on the regional market. In 2021, the economic recovery and an increase in consumers' disposable income further boosted market growth. Additionally, the rising number of NFT marketplaces is expected to create more opportunities for NFT trading, which, in turn, is expected to have a positive impact on the growth of the regional market in the forecast period.
The increasing demand for digital art is notably driving the market growth, although factors such as uncertainty in the NFT market may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Non-fungible Token (NFT) Market Driver
The increasing demand for digital art is notably driving the market growth. Digital art can be defined as anything of a visual nature that is created with the help of computers. Globally, NFT has gained traction in digital art applications through the Internet, social media, and other digital mediums. An NFT links a digital artwork through a token. After that, the owner or the artist can set a suitable price for the NFT artworks. The key will then be passed to the end user to certify proof of possession. For example, digital artists can sell one or more limited edition NFT offerings by issuing tokens. Artists can also create new forms of an NFT. These characteristics of NFTs permit artists to increase their sales, thus driving the growth of the market in focus during the forecast period.
Additionally, NFTs permit greater accessibility to the art world. Instead of visiting a gallery, buyers can instantly visit online portals to buy NFT artworks. Using NFT technology, the public can purchase art at a lower cost and in a secure, transparent manner. NFTs can also generate revenue for artists. NFTs can be used to sell artworks directly through virtual platforms, reducing the turnaround time of purchase. Such factors will drive the growth of the global NFT market during the forecast period.
Key Non-fungible Token (NFT) Market Trend
The emergence of fractionalized NFTs is the key trend in the market. NFT fractionalization is the act of dividing the ownership of an NFT among several people. As the popularity of NFTs continues to rise, the price of owning a single NFT is expected to increase. With fractional NFTs, democratized ownership becomes a possibility so that even as the bidding price of an NFT increases, market activity around that NFT remains relatively high, as more people can participate at lower prices. Even if one of the owners of that NFT decides to sell, it will not impact the overall price held by other stakeholders.
Moreover, NFTs will also lead to a lack of liquidity during the forecast period. While NFTs are in demand, their non-fungibility will lead to a lack of liquidity across most NFT marketplaces. However, with fractional NFTs, this liquidity can be sustained. For instance, smaller investors can participate in the NFT bidding, where fractionalized NFTs will be used to divide up the ownership of an NFT product. Therefore, fractionalized NFTs are expected to create new growth opportunities for the vendors in the market during the forecast period.
Key Non-fungible Token (NFT) Market Challenge
Uncertainty in NFT demand and pricing are major challenges for sellers in the market. These challenges refer to the uncertainty in determining the future value of NFTs. The valuation of NFTs depends considerably on scarcity, uniqueness, and the perception of owners and buyers alongside the availability of distribution channels. Therefore, for a new seller, it is extremely difficult to anticipate the identity of the next buyers of an NFT or the possible factors which can drive their purchase. Therefore, the value of NFTs will basically depend on how the buyers perceive their price, thereby leading to fluctuations.
As the market is completely in the nascent stage, it is difficult for new investors to predict some future trends in NFT pricing. A sudden fluctuation in NFT can lead to a huge loss for the owner. Even the owner of the NFT may not be able to sell the NFT collectable or artwork due to very low demand in the market. Such factors may restrict the growth of the market during the forecast period.
Key Non-fungible Token (NFT) Market Customer Landscape
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Non-fungible Token (NFT) Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Sorare - The company offers non-fungible token services such as the Football NFT platform as its key offerings. The company also offers a platform for football fantasy games where players buy, sell, trade, and manage a virtual team with digital player cards using blockchain technology.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
Based on application, the market is segmented into collectibles, sports, arts, and others. The market share growth of the collectibles segment will be significant during the forecast period. NFT collectibles are limited edition or rare NFT tokens which are minted on the blockchain. Collectibles are unique, and one collectible cannot be exchanged or traded with another collectible. Some of the vendors offering NFT collectibles include Funko Inc., Foundation, and Makerspace. These vendors provide an online platform for buying and selling NFT collectibles. The growth of the collectible segment is majorly driven by the growing demand for digital assets across the world.
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The collectibles segment was valued at USD 69.69 million in 2017 and continued to grow until 2021. Most industries have gone digital to market their products. The near-ubiquity of the Internet and widespread use of mobile devices, along with rising Internet usage, has encouraged companies to expand their offerings and investments related to digital assets. Additionally, the emergence of tokenization in the digital asset industry will further propel segment growth during the forecast period.
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APAC is projected to account for 39% of the global market share by 2023. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The NFT market in APAC is expected to grow due to the growing demand for digital assets in countries like Singapore, China, South Korea, the Philippines, and Japan. Korean retail channels are expanding their footprint into the flourishing NFT business by selling art and fashion items. For instance, in January 2022, CJ OliveNetworks Co. Ltd, a subsidiary of South Korea-based CJ Corp., announced that it is partnering with a domestic blockchain company Galaxia Metaverse to sell NFT artworks. Recently, the company auctioned Cherry Blossom Ending, an animated work by a local digital artist. Similarly, in April 2022, Lotte Home Shopping Inc. is expected to launch an NFT marketplace in South Korea. Therefore, such developments are expected to increase the market penetration of NFT products during the forecast period.
In 2020, the outbreak of COVID-19 affected many countries in the region, such as China, India, South Korea, and Japan. In 2021, economic recovery and an increase in the disposable income of consumers further improved market growth. Moreover, the increase in the number of NFT marketplaces is expected to create more opportunities for NFT trading, which, in turn, will positively impact the growth of the regional market during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by application, end-user, and region.
The reports categorize the global non-fungible token (NFT) market as a part of the global technology hardware, storage, and peripherals market within the overall global information technology market. The parent global technology hardware, storage, and peripherals market covers manufacturers of cellular phones, personal computers, servers, electronic computer components, and peripherals. It also includes data storage components, motherboards, audio and video cards, monitors, keyboards, printers, and other peripherals. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Non-fungible Token (NFT) Market Scope |
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Report Coverage |
Details |
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Page number |
160 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 35.02% |
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Market growth 2023-2027 |
USD 113,933.5 million |
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Market structure |
Fragmented |
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YoY growth (%) |
26.0 |
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Regional analysis |
APAC, North America, South America, Europe, and Middle East and Africa |
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Performing market contribution |
APAC at 39% |
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Key countries |
US, Canada, Thailand, China, and Brazil |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Binance Services Holdings Ltd., Cloudflare Inc, Dapper Labs Inc., Decentraland, Enjin Pte. Ltd., Foundation Labs Inc., FTX Trading Ltd., Funko Inc., Gala Games, Gemini Trust Co. LLC, Mintable.app, Mobox Digital Co. Ltd., Onchain Labs Inc., OpenSea, Rarible Inc., Sorare, SuperRare Labs Inc., Theta Labs Inc., Yellowheart LLC, and Yuga Labs LLC |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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