Activate Consulting, a management consulting firm for technology and entertainment industries, anticipates non-fungible tokens (NFTs) to become mainstream by 2022, claiming that every technology and media company will need to adopt this innovation.
In its 2022 tech and media outlook, an annual report which forecasts the key trends and offers insights into technology, Activate presented its view on NFTs, asserting that these digital collectibles will continue their way into a broader set of industries.
"As more consumer time migrates to digital experiences and interest grows in the metaverse, we believe that every technology and media company will need an NFT strategy," the company said.
NFTs are digital assets that act as a deed of ownership to a unique digital item. According to Activate, NFTs' value proposition is that they validate ownership and authenticity of digital assets. NFTs can also be programmed using smart contracts, enabling downstream royalties for creators every time an NFT changes hand.
With NFT sales surging to new heights, 2021 has been the breakout year for these assets. While sales volumes of NFTs for the entirety of 2020 were just south of USD 95m, per DappRadar data, that figure spiked to USD 1.2bn in Q1, USD 1.3bn in Q2, and a whopping USD 10.7bn in Q3 2021.
As per Activate, the surge coincides with a significant increase in both interest and purchase activity of NFTs among US traders. Reportedly, 73% of US NFT traders made their first purchase this year.
Activate also noted that "a broad set of industries are now creating and testing NFT products."
As previously reported, the prominent film producer Quentin Tarantino aims to release seven uncut scenes from 'Pulp Fiction' in the form of NFTs. Similarly, Warner Bros will release digital collectibles tied to the upcoming science-fiction film 'The Matrix Resurrections'.
Aside from the film industry, which is capitalizing on NFTs as a way to offer unique, exclusive digital arts to advocates, major brands and tech companies from a wide range of industries have also adopted NFTs.
Timeline of companies entering the NFT space in the US in recent months:
However, Activate argues that the NFT market is still in its infancy, reporting that only 25% of US adults are familiar with NFT, 17% are market participants, and a mere 7% are active traders. Of that 7%, the bulk majority are buyers, while just 30% are creators.
Activate says that the entrance of big players like Disney and Warner Bros is a good sign for the NFT industry but notes that there are still barriers. For one, the unregulated nature of cryptoassets and NFTs can drive some potential investors away.____
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