Some bitcoin backers are likely to invest in other cryptocurrencies, and crypto enthusiasts, broadly speaking, are apt to allocate portions of their portfolios to other digital assets, including non-fungible tokens (NFTs).
A recent survey by CoinGeck and Blockchain Research Lab indicates that NFTs, despite a recent slide in prices, are popular among crypto investors, as three in four of those investors also own NFTs. Just 2.5% said they previously owned NFTs and currently do not, and just 20% said they’ve never owned an NFT, according to the survey.
As has been seen with some cryptocurrencies, once some investors get involved with NFTs, they don’t buy just one, indicating that they see opportunity and value in the still-young asset class.
“Once people do get into NFTs, they usually seem to keep on buying and collecting more. At least 1 in 4 NFT holders said that they are avid collectors, with 51 or more NFTs at the time of the survey. This group likely represents people who are the most enthusiastic about NFTs, or traders who flip 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 noted above, NFT prices tumbled in 2022 as some market participants questioned the validity of the scarcity thesis and the point of owning digital images, plenty of which can be found elsewhere for free on the internet.
The CoinGecko/Blockchain Research poll indicated that roughly two-thirds of those surveyed acquired their first NFT last year or in 2021. That could be a sign that some are holding, waiting for prices to rebound. The statistic could also be a testament to the youth of the asset class and some risk-tolerant investors’ willingness to get involved in the early innings. As is the case with crypto, increased adoption is a vital catalyst for NFTs.
“The NFT market’s growth potential depends more on adoption, by making it easier for people to have 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 to encourage adoption of the technology,” according to the survey.
Some companies are leveraging NFTs as part of customer loyalty programs, framing the tokens offered on their platforms not only as collectibles, but as assets with profit potential, too. Efforts like that could spur increased NFT adoption.
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