If you haven’t noticed, cryptocurrency has been circling the financial news orbit fairly heavily over the past few weeks. The value of various cryptos has risen and fallen based on news like President Biden’s consideration of enhanced regulations, the Chinese government’s decision to outlaw cryptocurrency trading, and El Salvador’s declaration of Bitcoin as a national currency.
However, an emerging crypto fintech that has bubbled to the surface with slightly less fanfare is that of NFTs, or non-fungible tokens. CivicScience looked at the niche NFT market in April, but with the rise of Axie Infinity, and NFT marketplaces, the blockchain financial instrument has earned a second look.
As a brief reminder, while cryptocurrency acts roughly more like a traditional currency, with values rising and falling based on supply and demand, NFTs use similar base technology to closely resemble collector’s items, like art, baseball cards, or memorabilia. While buyable and sellable, NFTs tend to be a lot less volatile in value than cryptocurrencies.
And compared to April, investment in NFTs has doubled (from 4% to 8%) among the Gen Pop.
Disinterest in the blockchain technology, congruently, has slid from 87% to 80%.
Part of this growth may be an overall rise in familiarity with NFT technology.
But it may also be attributable to the emergence of marketplaces and apps dedicated to NFT creation, development, and trading, such as Axie Infinity.
Among the Gen Pop, the proportion of respondents who have played or intend to play mirrors the growth of the overall NFT investment marketplace.
Despite that, however, the Axie Infinity trend is clearly driven by age.
Survey respondents who have played Axie Infinity are significantly more likely to be aged 18-24, almost double the next older demographic (25-34-year-olds). Meanwhile, those who have no interest or have never even heard of Axie Infinity, are much more likely to be 35 or older.
While this data is probably unsurprising, what might be more surprising is Axie Infinity’s relationship to trend-watching in the stock market.
While those who closely watch trends in technology and electronics are significantly more likely to have played or be interested in playing Axie Infinity than those who don’t, the same applies to those who closely follow financial markets and the economy. This data may demonstrate that the particular asset that NFT represents for investors has grown beyond simple niche technology, and into a legitimate financial instrument. Or perhaps the game-like structure of Axie Infinity has made NFT as a technology and financial asset more approachable and accessible.
NFTs, however, don’t exist in a vacuum, as their purchasing, selling, trading, and development occurs on online marketplaces, some that may resemble online exchanges or digital wallets.
But of the most recognized NFT marketplaces, no clear platform stands out as the most popular.
Coinbase, you may remember, gained a significant amount of attention earlier this year as the first crypto marketplace to go public, yet clearly doesn’t occupy any space with a first-mover advantage.
Ultimately, the incidence rate with NFTs overall remains low. That isn’t to say the market itself isn’t growing, just that people who haven’t already jumped on board, simply aren’t interested, even as awareness increases. And those rates have only marginally shifted over the last six months.
Check back with CivicScience next week for a deep dive into the relationship between personal wealth and cryptocurrency investment as a whole.