After a bullish start in 2023 and optimistic first two months, the once booming NFT market again witnessed headwinds and weak sales figures, which knocked down market projections for the following years.
According to recent data, NFT marketplaces are expected to hit a $2.7bn value by 2025, less than half the earlier forecast.
Revenue Grows by 80% YoY but Remains Deep Below Pre-2022 Forecasts
The crypto winter has definitely cooled investors’ appetite for non-fungible tokens, with the number of sales and sales value remaining deep below last year’s levels. However, NFT’s poor performance over the past few months has also knocked down optimistic scenarios about future market growth.
In 2021, NFT marketplaces grossed $810 million in revenue, according to Statista data. This figure rose to $890 million last year, despite 2022 being one of the most challenging years in the crypto market’s history. In November 2022, Statista projections showed the entire market would significantly recover and hit a $3.68bn value in 2023, and by 2025, this figure would have jumped over $6.2bn.
Six months later, Statista’s forecast became much less optimistic. According to the latest data from April, NFT marketplaces are expected to gross around $1.6bn this year, or 56% less than in earlier forecast. This figure will grow by 70% in the next four years and hit $2.75bn in 2025, much less than the earlier expected $6.2bn.
Projections referring to user growth are also much less optimistic. In November, Statista expected the number of people trading at NFT marketplaces to hit 50.3 million this year and grow to almost 60 million by 2025. Now, these figures are cut down to 13.9 million in 2023 and 18.3 million in 2025.
Almost 20% more NFT Sellers than Buyers in the Market
The latest market projections came after already worrying figures referring to the number of active NFT wallets and the total number of buyers and sellers in this market.
According to NFTGo data, on May 23, there were 6,054 sellers and 5,056 buyers in the NFT market. This data is troubling because a greater number of sellers indicates there is more supply than demand, which may cause several NFT owners to lower their pricing, resulting in a further NFT market value drop.
NFT’s total market cap amounted to $7.71bn at the time of writing, or 42% less than in the same month a year ago, while total NFT sales volume plunged by 68% YoY to $9.9bn.
Most Active NFT Marketplaces
NFTs are unique digital assets that are stored on a blockchain, typically using Ethereum’s blockchain. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, NFTs represent ownership or proof of authenticity for a specific digital item or piece of content, such as artwork, music, videos, collectibles, virtual real estate, or even virtual goods in video games.
NFT marketplaces provide a venue for creators and collectors to interact and engage in transactions involving NFTs. They typically offer features such as browsing and searching for NFTs, listing NFTs for sale, bidding on or purchasing NFTs, and facilitating the transfer of ownership from sellers to buyers. Some popular NFT marketplaces include:
OpenSea: OpenSea is one of the largest and most well-known NFT marketplaces. It supports a wide range of NFT categories and has a large user base.
Rarible: Rarible is another popular NFT marketplace that allows users to create, buy, and sell digital collectibles, art, music, and more.
SuperRare: SuperRare focuses specifically on digital artwork and allows artists to sell their creations as NFTs.
Nifty Gateway: Nifty Gateway is known for its focus on high-profile artists and collaborations, offering limited edition NFT drops.
NBA Top Shot: NBA Top Shot is a marketplace for basketball-related NFTs, where users can collect and trade officially licensed NBA video highlights.
It’s important to note that the NFT market is still relatively new and evolving. It’s crucial to exercise caution and conduct thorough research when participating in the NFT space. Market dynamics, regulatory changes, and shifts in consumer preferences can all impact the future growth of NFTs.
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