Messari: What subcategories in the NFT market are worth paying attention to?
In the long run, the NFT market will continue to develop and grow into a market worth hundreds of billions of dollars.Original Title: "A Glimpse Into The Leading Categories Within The Deca-Billion NFT Industry"
Source: Messari Research
Original Author: Mason Nystrom
The NFT analysis platform NFTGo has released data showing that the total market capitalization of the cryptocurrency industry has reached $2 trillion, with the NFT market capitalization exceeding $15 billion, accounting for about 1%.
In addition to the well-known avatar and art NFTs, there are various types of NFTs, including:
- Avatars - BAYC, Punks, VeeFriends
- Game Assets - Loot, Sorare, ASm AIFA Genesis
- Utility Assets - membership assets
- Metaverse Assets - Sandbox assets (non-land)
- Digital Land - Sandbox LAND, Decentraland
- Social - HeadDAO, LinksDAO, MetaHero Universe
- Intellectual Property - Adidas, Budverse Cans, Pepsi Mic Drop, Twitter collection
- Music - Deafbeef, Eulerbeats, Kloud
- Finance/DeFi - Uniswap liquidity positions, yield bearing NFTs
Currently, the total market capitalization of NFTs has reached $18 billion, with avatar NFTs accounting for the largest share at $8 billion, exceeding the combined market capitalization of the second to fourth ranked NFT categories.
Game, art, and collectible NFTs follow closely behind, with market capitalizations ranging from $2.3 billion to $3.3 billion, and they are also the areas most consumers are focused on.
However, since some NFTs can be classified into multiple types, how to reasonably categorize each NFT is also a significant challenge. For example, if Nike issues an avatar NFT project, should these NFTs be classified as IP or avatars? As the NFT market matures, these types will become more clearly defined.
In percentage terms, avatar NFTs account for nearly 50% of the market capitalization, while most other subcategories have market capitalizations that are mostly in single digits.
Leading NFT types will continue to expand with the development of the NFT market, such as art NFTs. Compared to the global art market, which has a market capitalization of $1.7 trillion, the art NFT market is just the tip of the iceberg.
At the same time, types of NFTs like collectibles will gradually fade over time, while utility NFTs will stand out, including membership and cash flow rights.
Currently, the total trading volume in the NFT industry has exceeded $28 billion. As newcomers continue to flood in, more and more companies are utilizing existing IP or launching new IP to issue non-fungible tokens, and this industry will continue to thrive. Similar to the above chart, avatar, art, and collectible NFTs dominate the trading volume.
But more importantly, fundamentally, these NFTs are all static NFTs, meaning that aside from representing ownership of the corresponding assets and Discord access, the vast majority cannot provide additional utility value.
Although static NFTs are very valuable, as investors gradually lean towards seeking better experiences through their held assets, the demand for non-static NFTs will continue to rise, mainly including game assets, utility assets, and music NFTs.
Except for game NFTs, the percentage distribution of trading volumes for other types of NFTs largely resembles their market capitalization distribution. It is worth noting that the trading volume percentage of game assets is lower than their market capitalization percentage, indicating that many game assets in collections may not have been traded yet.
Although cumulative data can reflect much information, they cannot provide a more forward-looking perspective. The trading volume statistics over 30 days show a surge in game NFTs, which also reveals the reason for their high market capitalization despite lower cumulative trading volumes. Since market capitalization calculations typically use the most recent transaction price of the NFT collection for pricing, the growth rate of market capitalization often outpaces that of trading volume.
On one hand, the growth in trading volume for game NFTs may signify a further recovery in the gaming industry, which is also reflected in the growth of homogeneous game tokens driving the market capitalization of the gaming industry.
On the other hand, NFTs may also be a lagging indicator, while the surge in homogeneous game tokens acts as a catalyst for the development of game NFTs. In the future, the performance differences between homogeneous and non-homogeneous game token markets will be an important metric for measuring the trajectory of the gaming industry.
Aside from the gaming market, there is also a significant disparity between the trading volume and total cumulative amount in the NFT art market, with some trading volume coming from avatar NFT projects. Crypto art sales will continue to be dominated by four major platforms: Art Blocks, Nifty Gateway, Foundation, and SuperRare.
Ultimately, the long tail of intangible assets will achieve on-chain tokenization, and the types within the NFT market will become increasingly diverse. In the past few months, despite the overall downward trend in the crypto market, the NFT market has continued to reach new highs.
NFT traders and investors should keep in mind the following two seemingly opposing viewpoints—over the long term, the NFT market will continue to develop and grow into a multi-billion dollar market; but at certain times, the NFT market may also be generally overvalued.
