1. The impact of the COVID-19 epidemic has reduced people’s contact and collision in the physical world. In this process, people are becoming more and more accustomed to and integrated into digital virtual spaces: home offices are no longer new, they spend more time retaining and interacting in virtual spaces, and the value of virtual goods and services is more open and recognized. This may be an external factor that has driven the popularity of NFTs in the past two years.
Take crypto art as an example. The world today is moving towards digitalization, but art, as a medium to express human emotions and spirit, has not kept pace with the digital age. The works of art we can recognize are still primarily creations that exist in the physical world. NFT provides huge development space for digital art.
2. The popular market of encrypted digital market. Since 2020, the size of the cryptocurrency market has continued to rise, and the price of Bitcoin has repeatedly reached new highs, arousing people's interest in various encrypted digital assets. Among them, NFT, especially NFT art, may be the most closely related to the physical world among crypto assets, and it is also the most knowledgeable and tangible asset type for investors. It is bound to gain a wave of attention.
3. The explosion of DeFi has greatly improved the liquidity and tradability of NFTs. Due to their uniqueness and non-fungible nature, NFT tokens have had extremely poor trading liquidity in the secondary market in the past. However, with the rapid development of the DeFi ecosystem in 2020, the integration of NFT+DeFi has become the focus of market attention.
4. Each NFT can be traced back to its original issuer, so that every transaction can be verified to ensure the authenticity of the product and the rights of both buyers and sellers. This makes NFTs currently have real practical value support in the crypto art market.
5. NFT has almost no representative projects after CryptoKitties, but the entire ecosystem is still developing. In the past few years, although NFT has been tepid, there has always been a group of loyal developers and users who insist on exploring the field of NFT, which has led to improvements in the infrastructure of the NFT niche market. With the existing exploration of blockchain technology and NFTs, creators have found a new channel to enhance interaction with followers and fans and realize their achievements in the digital world. NFT is the product of the fusion of virtuality and reality. Compared with other applications based on blockchain technology, NFT is more closely integrated with reality and more practical. Of course, it is undeniable that these sky-high-priced NFT artworks, avatars, and tweets may have some hype elements. For example, Justin Sun, the founder of TRON, went to bid for Beeple’s paintings. He offered $60 million. Among cryptopunks, we don’t know how many people simply think this pixel avatar looks good or think it has high artistic value, so they are willing to spend tens of thousands of dollars to buy it. But it is undeniable that NFT has opened the door to the field of digital art, and also opened the door between the virtual world and the real world. According to the search volume data of Google Trends, the search volume of NFT, cryptocurrency (crypto) and blockchain (blockchain) has been very large in recent months. Last time so many people searched for the two key words of blockchain and cryptocurrency. This term was coined at the end of 2017, but the popularity of NFT this year has caused these two terms to hit a record high, and NFT has also ushered in a surge in popularity.
