The non-fungible token (NFT) market began to hit its stride in 2019 on the back of early blockchain gaming and crypto art adoption.
According to a recent year-end report by NonFungible.com, the leading data provider for the NFT industry, the total market capitalization of all NFTs stood at roughly $210 million in 2019. The report suggests this number could grow by as much as 50% in 2020 to $315 million.
While this may seem like a large number, it is still a fraction of the overall cryptocurrency market, which currently stands at $250 billion.
The report also anticipates that 2020 will bring a 30% increase in crypto gamers up to 147K and a 64% increase in USD trading volume for NFTs, to around $249 million.
The reason NFT trading volume and total market cap are so close is due to the illiquid nature of the market, which is currently driven mainly by auction and event-related sales. At present, there are roughly 23K active Ethereum addresses that hold NFTs, which is only a small fraction of the ~350K daily active ETH accounts, indicating that traditional crypto investors and users have yet to truly embrace the fledgling NFT market.
The report goes on to break out the numbers by individual game and marketplace platform, showing that early adopters have a high retention rate for the first three months but seem to lose interest as time goes by. This is likely a similar figure found in traditional gaming, however, the promise of blockchain gaming and new economic incentives could ultimately increase the tail of retention.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.