The Top NFT Trends of 2022
The NFT (non-fungible token) space over the last twelve months has been anything but boring. In fact, it has seen more than its fair share of twists and turns and ups and downs — and many got more than a bit lost in all the action.
If you could use a quick primer on NFTs in 2022, stay put. Here’s a summary of the year's most important NFT trends.
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2022’s Top 5 NFT Trends
Major Social Media Platforms Embrace NFT Functionality
A PFP NFT stands for profile picture non-fungible token, and it is precisely what it sounds like: a digital avatar whose ownership is verified by the blockchain. Some of the most popular NFT projects, including CryptoPunks and the Bored Ape Yacht Club, are PFP NFT collections now worth billions of dollars. While the heavy consumer investment signaled this NFT application might have legs, the corresponding moves by social media giants seemed to confirm the reality of the market demand.
Although the NFT market faced some headwinds in 2022, which we will cover soon, PFP NFTs appear to be a natural integration of this technology whose relevance will only grow over the coming years. Digital personas will only become more important as time passes, and PFP NFTs provide a viable way to enhance that identity.
Looking to leverage the power of NFTs in 2023? Dibbs offers a suite of tokenization services that can help your brand connect with a growing and enthusiastic audience. Schedule a demo to see how we could work together to build your web3 marketing strategy.
VC Investments in NFT Projects Skyrocket
NFTs entered 2022 on a tear. Trading value jumped an unbelievable 21000%, from $82M in 2020 to $17B in 2021. The dramatic increase in market demand also created crypto fortunes for many, resulting in more than $5B in profits. Naturally, this wave of activity did not go unnoticed by the venture capitalist community. 2022 saw major investors like Andreessen Horowitz, Softbank, Kleiner Perkins, Velvet Sea Adventures, Coatue, 01 Advisors, and more pour billions into the space.
2023 may see more heavy hitters place their bets on NFT tech, but those moves will likely be more conservative than what we saw last year. If economic history is anything to go by, the challenges the broader crypto market is facing — coupled with general uncertainty regarding the state of the global economy — will encourage investors to be very cautious.
Cryptocurrency Exchanges Compete with NFT Marketplaces
The traditional method of buying and selling NFTs can be tricky. Investors, collectors, and other interested parties can’t just purchase an NFT from a marketplace using cash. They first have to set up a wallet and fund it with crypto, then find an NFT marketplace and buy what they want using their new tokens. The process is easy enough for those with experience but fairly alien to anyone else.
Identifying the need to reduce friction in the NFT buying process, several high-profile cryptocurrency exchanges, including Binance and Coinbase, introduced their own NFT marketplaces to compete with major players like OpenSea. This move both enhanced their service offering and enabled these companies to bolster their revenues via NFT transaction fees. As we observed with VC funding, cryptocurrency exchanges will likely continue to invest in NFT support over the next year — while exercising a healthy degree of caution.
Market Valuations Take One Step Back
If 2021 was the year crypto went to the moon, 2022 was when it fell back to earth. After reaching a total market cap of nearly $3T in November of 2021, the value of cryptocurrencies fell by over 60% over the next thirteen months to around $800B. NFTs also experienced a sharp downturn, with trading volumes decreasing by double-digit percentages across the same period.
Context is critical for understanding what this may mean for the space moving forward. While cryptocurrencies aren’t at historic highs, they are still hundreds of times where they were just a handful of years ago. The same is true for the NFT market, which, as of November 2022, has average daily sales values several orders of magnitude larger than they were two years before. Fluctuations of this type are common with any new technology finding its footing, and they will likely continue in 2023 and beyond. But the overall trend has been up.
NFTs and Crypto Feel Growing Pains
2022 may be remembered as pivotal in blockchain technology’s maturing process. The second half of the year saw some of the industry’s biggest brands and names fall, as FTX, a leading crypto exchange, went bankrupt, its founder Sam Bankman-Fried was charged with fraud, and the ensuing fallout brought on what insiders are calling a “crypto winter.”
Although these events were painful for many in this space, they will likely only strengthen blockchain technology in the long run. Commentators have called for increased scrutiny and regulation within the industry for years, and these difficult circumstances have highlighted how important those safeguards are. Considering the first week of the new year has already seen Coinbase fined $100M for anti-money laundering failures, its clear regulators are applying more pressure than ever. And that’s a good thing: It will lay the foundation for a more robust and secure space.
How to Leverage NFTs in 2023
As the events of 2022 have illustrated, brands looking to utilize NFTs and crypto technology to connect with their audiences must ensure their Web3 partners are trustworthy and secure. Overseen by compliance experts and protected by rigorous security protocols, Dibbs’ tokenization solution offers brands the web3 opportunities they’re looking for while comprehensively safeguarding their assets against everything kind of threat. Schedule a demo today to see what partnering with Dibbs could look like for your brand.
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