An already booming NFT (non-fungible token) market will see a huge increase in volume over the next year as more major investors start to pile in, the boss of a leading financial services firm has predicted.
Nigel Green, chief executive and founder of deVere Group, made the bullish forecast following the announcement by Visa that it has bought a “CryptoPunk,” one of thousands of NFT-based digital avatars, for more than £108,000-worth of cryptocurrency ethereum.
Meanwhile, Marvel Entertainment has started unveiling its first official NFTs in the form of Spider-Man “digital statues”.
This is a market which is just getting started.”
Nigel Freen, chief executive, deVere Group.
An NFT is a unique digital asset designed to represent ownership of a virtual item, such as artwork, music, a video clip, or tokenised tweet, among other representations.
Mr Green said: “The market for NFTs hit new highs in the second quarter, with £1.8 billion in sales so far this year. This is almost 20-times more than the £9.9 million total in the first half of 2020.
“With soaring interest from major investors like payments giant Visa, who understand and value that the future of almost everything is geared towards digital, demand is set to explode.
“As the big hitters pile in, their capital, expertise and reputational pulling power will attract a growing number of other investors, both retail and institutional, looking to get into the market.”
He added: “Demand will also be fuelled by a growing number of NFT marketplaces where you can make purchases, as well as there being more and more artists, musicians, sports, fashion, entertainment, gaming and retail brands producing digital assets to engage with consumers, clients and fans.
“This is a market which is just getting started. There’s been a surge of interest this year but I believe 2022 will be the breakout for NFTs.
‘Digital lives’
“We expect there to be a massive increase in volume in the market over the next 12 months.
“Demographics are on the side of NFTs too. Millennials, and Gen Z especially, have digital lives and it’s natural to want to take digital representations of luxury brands, sport, music and art into these worlds – and now they can.”
‘Caution should be exercised’
But Mr Green warned: “The market remains young and highly speculative, so caution should be exercised. It can be expected that some of the NFTs on the market now will have little value in a few years. But some will be worth a fortune.
“It’s a similar situation to websites in the early days of the internet.
“As with any kind of investment, the key is being able to pick the winners and avoid the losers in what is a volatile market driven by fast-changing trends and tastes.”
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