Crypto holders are embracing NFT assets
Some bitcoin supporters are likely to invest in other cryptocurrencies, and crypto enthusiasts, by and large, are inclined to allocate parts of their portfolios to other digital assets, including non-fungible tokens (NFTs).
A rlatest survey from CoinGeck and Blockchain Research Lab indicates that NFTs, despite a recent drop in prices, are popular among crypto investors, as three out of four of these investors also own NFTs. Only 2.5% said they previously owned NFTs and currently do not, and only 20% said they have never owned an NFT, according to the survey.
As has been seen with some cryptocurrencies, when some investors first get involved in NFTs, they don’t buy just one, indicating that they see opportunity and value in the still-young asset class.
“Once people get into NFTs, they usually seem to keep buying and collecting more. At least 1 in 4 NFT holders said they are avid collectors, with 51 or more NFTs at the time of the survey. This group likely represents people most enthusiastic about NFTs, or traders flipping NFTs,” noted CoinGecko. “Those who owned 11 to 50 NFTs made up 18.7% of holders, while those with a handful of 2 to 10 NFTs made up another 25.8%. Specifically, NFT holders with 2 to 5 NFTs were the second most common.”
As mentioned above, NFT prices fell in 2022 as some market participants questioned the validity of the scarcity thesis and the point of owning digital images, many of which can be found for free elsewhere on the internet.
The CoinGecko/Blockchain Research survey indicated that roughly two-thirds of respondents acquired their first NFT last year or in 2021. That could be a sign that some are holding on and waiting for prices to rebound. The statistics may also be a testament to the youth of the asset class and the willingness of some risk-tolerant investors to get involved in the early rounds. As is the case with crypto, increased adoption is a major catalyst for NFTs.
“The growth potential of the NFT market depends more on adoption, by making it easier for people to get their first experience with NFTs. NFT collections from well-known brands like Adidas and Starbucks, and seamless NFT experiences like Reddit’s Collectible Avatars help encourage adoption of the technology,” according to the survey.
Some companies leverage NFTs as part of customer loyalty programs, framing the tokens offered on their platforms not only as collectibles, but also as assets with profit potential. Such efforts can stimulate increased use of NFT.
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The opinions and forecasts expressed herein are solely those of Tom Lydon and may not materialize. Information on this website should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.
