Utility, Long Term Profits Top Two Reasons Making People Buy NFTs: Report

Over three hundred members of the NFT community participated in this survey conducted by GoinGecko and the Blockchain Research Lab.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 11 April 2023 17:25 IST

Utility, Long Term Profits Top Two Reasons Making People Buy NFTs: Report

Photo Credit: Larva Labs

59 percent NFT buyers claimed they indulge in the space to disrupt established structures and industries

Highlights

Over 71 percent NFT buyers are excited to engage with the new tech
About 68 percent responders wished to join the NFT community
Over 63 percent responders see NFTs as tools for financial savings

Non-fungible tokens (NFTs), that are digital collectibles built on blockchains, have puzzled outsiders of the Web3 world on — why someone would invest thousands or millions on buying images or GIFs at all? Well, a new research report claims that the utility of NFTs in the Web3 world is the top reason why tech-savvy investors are turning their attention towards buying digital collectibles. Mostly, NFTs are engageable with metaverse ecosystems that makes them usable for trading and liquidity purposes. For gaming ecosystems, NFTs also unlocks several privileges and rewards for their holders.

Over three hundred members of the NFT community participated in this survey conducted by GoinGecko and the Blockchain Research Lab. Out of these, 77.6 percent NFT holders justified their purchases for using these digital collectibles for their functions and utility quotient.

The second most major reason why NFTs appeal to the buyers is the element of long-term profits that they hold.

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More than just cartoonish-images or small media files, most NFTs hold a financial value that could yield profits in the long term for their holders. Each NFT collection has its supply and rarity criteria, that distinguishes them from competing NFTs and plays a role in its value increasing or decreasing with time.

Other factors linked to the NFTs like their specific use cases, their creators, or artists associated with them also weigh in on the pricing shift for these digital collectibles over time.

Out of all who were surveyed for this report, 76.1 percent responders saw NFTs as long term investment tools.

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“NFTs are increasingly being accepted as an inevitable development in the digital world. Not only are NFTs popular among crypto holders, with over 75 percent owning at least one NFT, but traditional industry brands also have NFT collections,” the report said.

In recent years, several big brands across industries have released their NFTs in order to engage with the new age customers. These brands include Gucci, Lamborghini, and Pumaamong others.

It was estimated that a total of $260 million (roughly Rs. 2,074 crore) were collectively bagged by high-end luxury brands including Nike, Gucci, Dolce & Gabbana with the sales of their NFT pieces last year.

Many NFT buyers are also known to re-sell their collectibles in exchange for cash or other NFTs.

Apart from their utility and investment quotient, there a bunch of other reasons also why members of the Web3 community are continuing to pour investments on them.

These include intrigue to experiment with the new technology, gaining a stake in the NFT parent company, or promoting social welfare and contributing to charities.

Interestingly, 59 percent NFT buyers claimed they indulge in the space to disrupt established structures and industries.

NFT sales reportedly rose by a massive 117 percent in February 2023. Around March, the valuation of the global NFT market climbed to its nine-month high since June last year to over $2 billion (roughly Rs. 17,200 crore).

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Further reading: Cryptocurrency, NFT, Web3

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More