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NFT market analysis 2021: key lessons learned

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Non-Fungible Tokens (NFTs) or digital funds represent assets like online-only assets, digital artwork, and real estate. Other examples are cryptocurrencies like Bitcoin, Ether (ETH), and Litecoin, that work based on blockchain technology. It has proven to be a profitable investment. 

The NFTs are growing in popularity, and in 2021 they have increased by $95 million and were worth USD 24.9 billion. And the latest market report by Technavio says that the NFTs market size is expected to grow by $147.24 billion by 2026 at a CAGR of 35.27%. 

25 million people were holding one of the well-known NFTs in their crypto wallets in 2021. And after many improvements, the number of investors in crypto wallets grew from 75,000 to 2.3 million the same year. 

Key lessons learned in NFTs

Finding an ever-lasting NFT is hard

According to the Financial Times, as of 2021, 360,000 NFT owners were holding $2.7 million worth of NFT funds. Almost 90 – 99% of these funds have the possibility of going down to zero after a certain period. But people aiming for long-term investments must be wise when choosing the NFT category or the funds they invest in because NFTs are unlike regular stocks. These can collapse at any moment. The intelligent NFT investor should look for rare NFT funds through a portfolio tracker app.

NFTs are Volatile

Investing in NFTs and crypto is not the same as the other funds. The NFT market can be highly volatile sometimes with an average of 10% returns each year. Investors should only get into NFTs if they can digest the facts of a 500% increase or decrease in a night because there are investors who lost thousands while the same enjoyed the benefits of increments in thousands. One such situation is the metaverse currency SAND, which grew in gains by 1000 percent within a few weeks. 

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Lessons Learned

  • NFTs are unlike most other funds. NFTs do not assure anything since they are highly volatile to market conditions and greatly depend on various factors.
  • Only invest in NFTs after understanding how they work. Intense research is required.
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Requires Technical Knowledge to purchase NFTs

Since NFTs are invisible digital funds, everything is maintained digitally on digital applications like a laptop or computer. So, the investor should have at least the basic technical knowledge to monitor the funds. In most cases, the funds can be monitored with the help of the NFT tracker 

Only a bunch of people know about the cost-effective process, while most others tend to perform this procedure in an expensive or unsecured manner. 

High Transactional Costs

There are options to trade cryptocurrencies inexpensively, but it is yet to happen in NFTs. Different activities performed on the fund like buying, minting, selling, or moving can charge high transactional charges. The transactional cost of the Ethereum blockchain would be around and above 100 US dollars. These prices are determined based on the supply, demand, and design of a particular blockchain.

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Radhe Gupta
Radhe Gupta is an Indian business blogger. He believes that Content and Social Media Marketing are the strongest forms of marketing nowadays. Radhe also tries different gadgets every now and then to give their reviews online. You can connect with him...

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