Each week, Benzinga conducts an investing-focused survey to collect data on what traders and investors are thinking.
This week, we shifted our focus to the blockchain and the emerging market for non-fungible tokens (NFTs). We asked the following question to over 500 traders and investors concerning NFTs:
Where do you see NFTs most likely being in 10 years?
Replaced regular art/made it obsolete
Successful market alongside standard art forms
Limited adaptation outside of a niche community
Non-existent market (i.e. tulip bubble)
The top response was "Successful market alongside standard art forms," with 37.2% of respondents indicating that this is where they most likely see NFTs at in 10 years.
Non-fungible tokens have been on everyone’s mind since the start of 2021, but what is an NFT?
Simply put, NFTs are unique tokens on the blockchain that are used to establish ownership of digital collectibles and digital art. While the market for NFTs has been on fire, with over $100 million In NFTs selling in 30 days, there is evidence that most buyers come from outside the established art industry. Accordingly, in 10 years there very well may be a successful market for NFTs alongside traditional art.
The second-highest response was "Non-existent market (i.e. tulip bubble)," with 28.2% of respondents choosing this option. While non-fungible tokens are certainly a fascinating new concept, the fact of the matter is Bitcoin and other cryptocurrencies are still not widely used as currencies.
In fact, just a few weeks ago 72% of investors indicated that they believe Bitcoin is experiencing another bubble. If Bitcoin and other cryptocurrencies experience a correction, investors could see a rapid decline in the value of NFT-affiliated art as well. Ten years is a long time, but there is certainly a risk that the NFT bubble will pop by then.
The next-highest response was "Limited adoption outside of a niche community," at 20.8%.
NFT art has gone mainstream in 2021, with online marketplaces such as NBA Top Shot becoming household names. But the rapid influx of users onto these platforms could leave some newbies holding the bag. If the hype surrounding NFT art cools off and causes a decline in value, users could view it as a fad and call it quits.
If this were to occur, we may only see a niche community of crypto enthusiasts involved in the NFT space 10 years from now.
Last but not least, 13.8% of respondents selected "Replaced regular art/made it obsolete."
While the idea of traditional forms of art being replaced by NFTs in 10 years may sound far-fetched, it may not be. In fact, a major auction house recently became the first to sell a piece of NFT art, netting nearly $70 million. If more typical art dealers continue to jump into the NFT space, the art industry could look drastically different in 10 years.
Photo courtesy CryptoKitties.