Exploring the NFT Landscape in 2024

NFT or Non-Fungible token as another application of the blockchain technology emerged more than a couple of years ago. However, crafting the very first NFT goes back to 2014, when Kevin McCoy minted the first NFT called Quantum on Namecoin. A few years later, when Ethereum created a comprehensive and easy to use platform on Ethereum blockchain network, the NFT market witnessed a surge in quantity and popularity. Since then, tens of thousands of NFTs came into existence and there are still to come. The downturn in the cryptocurrency market had some positive and negative impacts on the NFT market. The slowdown in the NFT market caused many investors to quit the market. However, at the same time, the downtrend forced many impractical and purposeless NFT projects to get out and  innovative ideas and useful applications replaced them.

NFT Trends over time

Since the introduction of NFT back in 2021, the blockchain-based application has witnessed ups and downs. During 2021 and 2022, NFT emerged as a phenomenon to tokenize digital assets such as a digital photo, artwork, etc. The market experienced an explosive growth and simultaneously faced challenges such as fraud and scam. The NFT market continues to grow by removing purposeless projects and welcoming innovations. Tokenization of RWA which is short for Real World Asset as a breakthrough to the NFT world revolutionized the NFT landscape. Real World Asset tokenization brings a lot of valuable advantages to different markets and sectors such as real estate, luxurious goods, etc. For instance, fractional ownership within blockchain networks is now possible, which opens the doors to small-scale investors to invest in assets that are higher in price.

The Horizon for NFTs in 2024

The horizon in 2024 looks bright for NFTs in general and for some special types of NFTs in particular. Here are the main types of NFTs that are expected to grow in 2024.

• RWA or Real World Asset

Real World Asset tokenization has significantly attracted people’s attention all round the world. There are lots of exciting advantages associated with such a blockchain-based application. The most important one is that asset tokenization makes fractional ownership possible. As such, more investors become able to invest in high value assets such as real estate. That will be the same for other types of valuable assets, such as jewellery, fine arts, etc. The real estate sector has been popular among a broader range of investors, so the property backed NFTs are expected to do better in 2024.

• Gaming NFT 

Computer games have always been popular since almost 40 years ago, when the initial games emerged. Nowadays, online gaming is one of the big money making industries across the globe. With integration of NFT with the gaming industry, the user experience, gaming asset ownership, user engagement and in-game economics will significantly improve. Hence, it is expected that the gaming NFT will experience a rapid growth in popularity and value in 2024.

• Music Industry NFT

Tokenizing music and albums helps musicians to not only protect the loyalty of their work but also better monetize their work as well as quicker compensation. As the blockchain industry advances, it is expected that more popular musicians decide to tokenize their products. 

Downsides of NFT in 2024

• Regulatory Concerns

Blockchain in general and NFT in particular are still suffering from lack of sufficient and robust regulations and legal systems all around the world. Even though some governments like the UAE government have started to work on UAE regulations on asset tokenization, it is still at its early days and there is a long way to go. Regulatory risk is a serious concern in regards to investing in NFTs.

• Market Volatility 

Despite the popularity of the NFT market, it is not deep enough yet. Regulatory risk along with people’s lack of knowledge about NFT are the main factors that make the NFT market quite volatile. The NFT market correlates with the cryptocurrency market that is considered to be a volatile and risky market to invest in.

Bottomline

Blockchain technology is evolving, so is the NFT industry. Real World Asset tokenization is revolutionizing the traditional investment landscape by providing the possibility of fractional ownership, better liquidity and more transparency. There are lots of other advantages associated with NFT that make the future bright for this type of blockchain application. However, there are some risks that must be aware of when making a decision to invest in the NFT market. The major risk is the regulatory risk that refers to lack of regulations across the globe for tokenized assets. As such, to safeguard your money, always invest in regulated projects in the countries where there are robust legal systems for asset tokenization.