NFT Market: Growing Momentum in Business Institutions
We have been in the NFT bear market since the mid-September, and recent strength in ETH and high gas fee on the Ethereum network have further pressured on demand and dried out liquidity. Average daily sales on OpenSea shrank to $40 million plus/minus for the past week, the lowest level since the beginning of August and down from $300M+ in the late August. Having said that, we have also seen significantly growing momentum on business institutions entering the NFT space in the past month or so. Facebook’s big step into the metaverse, Coinbase’s launch of NFT marketplace platform, Tik Tok’s launch of NFT collections, top consumer brands’ (such as McDonald and Nike) NFT initiatives, and so on, indicated a potential inflection point of public adoption and expansion of use cases amid development of the NFT market. This supports our long-term bullish view on the NFT market (referring to my last article as below).
In this article, I summarize some of key milestone events for the past month and their implications to the NFT market.
TikTok Launched The First-Ever NFT Collection (September 30 2021). On September 30 of 2021, TikTok launched its first-ever NFT collection, named as TikTok Top Moments, designed by TikTok community-defining creators. TikTok Top Moments features a selection of six culturally significant TikTok videos from some of the most beloved creators on TikTok. Creators including Lil Nas X, Rudy Willingham, Bella Poarch, Curtis Roach, Brittany Broski, FNMeka, Jess Marciante and Gary Vaynerchuk have made short videos across entertainment, culture, and the TikTok community, and are also partnering with prominent NFT creators, including COIN ARTIST, x0r, RTFKT, Grimes, and more, on limited edition NFTs.
While Top Moments NFT initiatives look experimental for TikTok, I believe this is just a beginning of the journey that TikTok will bring something unique and groundbreaking to the NFT landscape. This is also a big milestone for the overall NFT market development. As TikTok has over 1 billion monthly active users worldwide, TikTok’s entering NFT space could potentially drive NFT adoption in the mainstream.
Coinbase Announced to Launch the NFT Marketplace (Octobor 12 2021). Coinbase announced upcoming launch of Coinbase NFT (late 2021), a peer-to-peer marketplace that will make minting, purchasing, showcasing, and discovering NFTs easier than ever. In less than a month, there have been over 2.4 million users on the waitlist, while there is still huge room for growth with Coinbase’s 68M+ verified users.
I think Coinbase’s entrance into NFT market could make NFTs more accessible to the public given user-friendly UI, security, and low-barrier trading experience that Coinbase could bring to its users just as it helped its users access Bitcoin or other cryptocurrencies in an easy and trusted way. Therefore, I view launch of Coinbase NFT as not only a catalyst for the current bear market in the near term but a support for the secular trends in the NFT market.
Facebook Bets on the Metaverse (October 2021). Following the headline news that Facebook planned to hire 10,000 jobs in EU over the next five years in a push to build the “metaverse.” on October 17, Facebook changed its name to “Meta” (and stock ticker to “MVRS”) as a major rebrand on October 28. These initiatives, along with investment plan of $10 billion in the metaverse this year, reveal the Company’s ambition and optimism about the metaverse.
As I pointed out the view that NFT is the key access to the metaverse in my last article (check the link at the beginning of the article). NFT fits perfectly in the metaverse theme given blockchain-based tokens that can be used to demonstrate proof of ownership over digital items used as avatar IDs, assets (i.e. virtual land, houses, etc), or access to exclusive events, as well as be transferrable in the metaverse. There is no reason to doubt that Facebook will get into the NFT space in the foreseeable future. If that’s the case, I believe there will be meaningful progress in NFT adoption to the mainstream.
Entrance of Top FMCG Brands (McDonald, 10/29; Nike, 11/2/2021). McDonald (USA) has joined in the NFT space with launch of limited edition NFTs to celebrate the return of its McRib product line. The McRib NFTs featuring the sandwich will be awarded to ten consumers participating in the promotional campaign. It is a little bit surprising to me that the legendary consumer brand began to adopt NFTs into its marketing campaigns and very interesting to see how NFT is utilized into brand marketing.
Nike seems to be embracing NFT as the future as well. According to the U.S. Patent and Trademark Office, Nike has filled several trademark applications, including ones for the slogan “Just Do It” as well as the Swoosh and Jumpman logos. Each indicates an obvious intent to make and sell virtual goods. While we don’t know details of Nike’s plan in “virtual goods”, it is no doubt that NFT will be a natural fit for the new initiative.
Final Thoughts: It is encouraging to see big enterprises’ moves into the NFT space, which could potentially accelerate adoption in NFTs and expand NFT’s use cases in the real life. This reinforces my long-term bullish views on the NFT market and I expect more institutions to get on board in the future.
