Income from cryptocurrencies and non-fungible tokens (NFTs) is expected to cross $70 billion by 2025, despite the challenges posed by the COVID-19 pandemic, a financial report has said.
The CryptoMonday.de report stated that while the world grappled with the downsides of the pandemic, the crypto space registered unprecedented booms, NFTs in particular registered a meteoric rise in their adoption last year.
Data points to NFTs continuing to contribute a small percentage of the crypto sector’s revenue.
The NFTs are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency.
The report said it had been analysing trends within the crypto space and projected that income from crypto and NFT marketplaces would surpass the $70 billion mark by 2025.
The crypto sector could be niching, alright, but there’s no denying that it is handling colossal sums.
The Opimas study indicates that NFT marketplaces and crypto exchanges generate more revenue than traditional venerated stock exchanges.
The report suggests that exchanges like Binance and Coinbase and NFT platforms, including OpenSea and Rarible, earned up to $3 million daily.
“Most of the crypto generating these earnings come from very few wallets. That’s because the crypto space is high-stakes and very volatile These exchanges and marketplaces derive a significant portion of their revenue from fees. They include transaction, listing, and conversion fees. Listing fees could earn the platforms huge sums as they could go as high as $15 million a token,” it said.
Also, Binance Labs, the venture capital and incubation arm of Binance, has announced the closing of a new $500 million investment fund. The fund is supported by leading global institutional investors such as DST Global Partners, Breyer Capital, and Whampoa Group. Other major private equity funds, family offices, and corporations, also subscribed to the fund as limited partners.
The new fund will invest in projects that can extend the use cases of cryptocurrencies and drive the adoption of Web3 and blockchain technologies.
Founder/Chief Executive Officer (CEO), Binance, Changpeng Zhao ‘CZ’, said: “In a Web3 environment, the connection among values, people, and economies is essential, and if these three elements come together to build an ecosystem, that will accelerate the mass adoption of the blockchain technology and crypto. The goal of the newly closed investment fund is to discover and support projects and founders with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social, and more.”
Furthermore, the sector will need to grow at a compound yearly growth rate (CAGR) of 21 per cent from this year to 2025.
That way, NFT revenue will jump to $6.9 billion, nearly a 10th of crypto trading income.
“The difference in NFT CAGR and their portion of the crypto revenue will possibly impact user adoption,” said CryptoMonday’s CEO Jonathan Merry.”
He continued: “Market data indicates that crypto adoption will grow at 4.5 per cent, whereas NFT adoption will do so at one per cent. This relatively low percentage could be pointing to a niching of the crypto trade for a long while.”