We’ve witnessed a tumultuous year in the world of NFTs and cryptocurrency. According to Dune Analytics, the NFT market saw a decline of 97% within the past 9 months. Similarly, Bitcoin faced a 63% drop in value, falling from $46,000 in January 2022 to around $23.500 today.
However, this decline in the market doesn’t paint the full picture of the future potential of NFTs and the Web3 technology. As the industry continues to evolve, both marketers and consumers are gaining a deeper understanding of the limitless possibilities of NFTs and Web3, which I anticipate will lead to a resurgence of brand innovation in 2023.
NFT 1.0 was primarily characterized by the popularity of NFT collectibles, with RTFKT generating $3 million in NFT sales in just 6 minutes at its peak. Despite the initial hype, the market faced a decline due to the majority of NFTs having limited utility value. This market shift has prompted a reassessment of the NFT market opportunity, leading to smarter investments in the future.
Enter NFT 2.0, where the focus has shifted to content, community, and commerce. Brands like AMC and The History Channel are now offering NFT products that offer more than just content assets. NFT owners can now have increased brand influence, collaborate with brands on new assets, and gain access to exclusive online communities and events. The communities built around NFTs can also provide valuable insights for brands, enabling them to better understand their biggest fans and inform future content. Additionally, NFTs offer a unique opportunity for real revenue generation, with the potential for merchandise, limited edition collectibles, funding for new projects, and even charitable giving.
Web3 is the underlying technology powering the evolution of NFTs and other related technologies. There are three primary areas of opportunity within Web3: extended reality, investing, and omnichannel extension. The first trend is the integration of physical and digital experiences, creating a new phygital world for consumers. The second opportunity is the tokenization of hybrid collectibles, like Gucci’s SuperGucci, which provide fans with both physical and virtual products. Lastly, Web3 offers a diverse range of channels, assets, and communities to marketers, allowing for cross-platform and channel targeting and tracking.
In conclusion, despite the recent decline in the NFT and crypto market, the future is bright for NFTs and Web3 technology. With a renewed focus on content, community, and commerce, NFTs and Web3 are poised to revolutionize the way brands engage with consumers and generate revenue.