1-3. Key Market Status

NFT art is now the fastest-growing sector of the NFT market at 1.3 times the semiconductor market and 2.3 times the sound source market, proving itself a mega-market resilient to recessions, inflation, and even a pandemic.

The art market experienced its worst recession in more than a decade in 2020 due to the worldwide Covid-19 pandemic. And yet, in 2021, NFT art was one of the few markets globally that rallied back to reach levels even higher than before. According to the 2022 Art Basel and UBS Global Art Market Report, aggregate sales by dealers and auctioneers soared 29%, reaching $64.4 billion despite growing inflation.

NFT-based art broke all records in March 2021, when Beeple’s digital collage “Everydays: The First 5000 Days” sold at Christie’s New York for $69.3 million. That sale was the tip of the spear as non-fungible token art continued to reshape the market over the next year.

| Today’s Global Art Market

Three countries dominate 88% of the global art market, with the United States remaining the largest single market, with sales rising by a third in 2021 to just over $28 billion (44%). Greater China’s sales grew even more at just over a one-third, lifting it to the number two spot with $13.4 billion (21%). The UK market also grew by 14%, reaching $11.3 billion, but slipped from its previous ranking against China (19%).

| NFT Art Revolution

In the Before Times of 2019, sales of NFT art and collectibles on popular blockchains, including Ethereum, totaled $4.6 million – a respectable number, considering most people in the art world couldn’t explain what NFT stood for then. But by the end of 2021, that number skyrocketed to $11.1 billion (which isn’t part of the $64.4 billion figure for the art market as a whole). Art-related NFT sales expanded more than a hundredfold to $2.6 billion, fueled by other significant sales. For example, a Tyler Hobbs work sold for $3.3 million in August 2021. (Collectibles also peaked that month, with two CryptoPunks selling for more than $4 million.)

Of the high net worth (HNW) collectors surveyed, a whopping 74% reported buying art-based NFTs in 2021

| Fastest Growing NFT Art Markets

The Asian NFT art market emerged as a top-three global leader during the NFT craze, with transactions in Central and Southeast Asia accounting for 35% of the $22 billion in global NFT traffic in 2021 (2022, Chainalysis, Inc.).

Southeast Asian countries such as the Philippines (9.5%), Thailand (7.9%), and Malaysia (10.5%) took top spots on the global NFT traffic list. In comparison to the United States (3.9%), the UK (3.3%), Canada (6.2%), and Germany (3.4%), Asia has a significantly higher transactional rate.

| NFT Service Features

Differentiation and development around specialized services.

OpenSea is the most dominant and comprehensive NFT platform, though there is a strong trend toward vertical platform services. Super Rare selects artists in fields pertaining to sports cards, game items, and NFT art and operates mainly on high-value transactions centered on NFT quality. Raible is a community-based DAO service.

Ethereum-DApp-centric platform

Currently, most NFT platforms are built and serviced by the DApp platform of the Ethereum blockchain. As a result, the burden of high fees (gas costs) incurred when using the Ethereum network has increased.

Auction and price-based pricing.

On most NFT platforms, the initial price is set mainly for artists, and the price is determined at auction, thus excluding the market or user for the NFT valuation. As a result, there are frequent cases of sharp price drops during the 2nd sale, which has raised skepticism about the resale value of NFTs.

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