Bright Future for Bitcoin NFTs with long term potential
The Ordinals project, which uses the Bitcoin blockchain to create NFTs, has gained popularity recently, indicating a new opportunity for the largest cryptocurrency. However, experts believe that in order to become the market leader, accessibility and security need to be improved.
According to data from Dune Analytics, over 90,000 Ordinals have been minted on the Bitcoin blockchain. On February 9, the number of mints reached an all-time high of over 20,000. “Given current trends and hockey stick growth, we’re definitely headed to more Bitcoin NFT inscriptions now than fewer,” said Nick Hansen, CEO and co-founder of Luxor.
While Ordinals is not the first project to bring NFTs to the Bitcoin blockchain, it stands out because it inscribes directly onto satoshis, the smallest denomination of Bitcoin. Other NFTs usually link to the images on-chain, whereas Ordinals puts the image directly in the blockchain.
Although Ordinals and Bitcoin NFTs are rapidly gaining popularity, they are still in their early stages, especially when compared to Ethereum and Solana. Ethereum, the number one blockchain by NFT sales volume, saw volumes increase 35.5% to $860 million across over 178,000 buyers in the past 30 days, according to CryptoSlam data.
Bitcoin NFTs will compete with other major NFT ecosystems such as Ethereum, and some experts believe that many Ethereum NFT projects will build bridges to move to Bitcoin.
The current infrastructure for Bitcoin NFTs is clunky and often done manually, which means that many people are completing inscriptions themselves rather than through an NFT marketplace.
Nonfungible tokens (NFTs) have become one of the most significant aspects of Web3 in the past two years. NFTs store data on blockchains that may include various forms of media, including photos, videos, and audio, and can also be related to physical items. The owner of an NFT typically has ownership rights over the data or material connected to the token. NFTs have gained popularity in the art and gaming industries, where they have ushered in a new era of video gaming, including blockchain-based play-to-earn games. Despite NFT sales remaining strong in the first half of 2022, there have been negative aspects, including the decline of trading volume and users losing their NFTs due to errors. However, NFTs remain highly visible and have seen continued adoption by celebrities and within the music, art, and digital collectible industries. Experts believe that NFTs will continue to play a crucial role in the digital economy and that the NFT market could be worth $231 billion by 2030.
Jefferies, an investment bank, has noted the emergence of non-fungible tokens (NFTs), which are allowing brands to expand their reach into the digital world. Analysts led by Stephanie Wissink have raised their NFT market-cap forecast to over $35 billion for 2022 and to over $80 billion for 2025. Brands and celebrities are purchasing plots of virtual “land” in The Sandbox and Decentraland, which allows them to digitally market and extend their brands. Jefferies recommends that clients build a basket of investment exposure across video game, toy and game, and social media companies. For consumer exposure, the bank suggests Hasbro, Mattel, Funko, and GameStop, while for metaverse exposure, they include Meta, Snap, Activision Blizzard, Electronic Arts, Take-Two Interactive Software, Warner Music Group, Universal Music Group, and Roblox. The bank notes that while the Ethereum blockchain is still the most popular choice for minting NFTs and building metaverses, high transaction fees have pushed brands to consider alternative networks. This trend was also highlighted by rival investment bank JPMorgan in a report last week, which said that Ethereum’s dominance in NFTs was shrinking due to congestion and high gas fees.