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Jefferies Sees the NFT Market Reaching More Than $80B in Value by 2025.

The bank increased its market-cap prediction for 2022 to more than $35 billion, with double-digit percentage growth expected over the next five years.

In an analyst note, Jefferies stated that the confluence of the digital and physical worlds is taking shape, with non-fungible tokens (NFTs) allowing companies to expand their reach into "digitally-enabled experiential tie-ins."

In a research released Tuesday, analysts led by Stephanie Wissink boosted the bank's NFT market-cap prediction to more than $35 billion for 2022 and more than $80 billion for 2025.

The bank notes that companies and celebrities are buying plots of "land" in the Sandbox and Decentraland, allowing them to market, raise awareness, and extend their brands online. There was a rush into digital real estate acquisitions in November, with NFTs serving as the "digital building blocks,” the note said.

Jefferies considers digital assets to be an emerging technology, and advises clients to diversify their investment portfolios by including video game, toy and game, and social media companies.

Hasbro, Mattel, Funko, and GameStop are among the consumer brands mentioned by the bank. Meta, Snap, Activision Blizzard, Electronic Arts, Take-Two Interactive Software, Warner Music Group, Universal Music Group, and Roblox are among those with metaverse exposure.

While the Ethereum blockchain remains the most popular choice for minting NFTs and creating so-called metaverses, according to Jefferies, the network's high gas, or transaction, prices have prompted businesses to examine other networks.

Last week, rival investment firm JPMorgan noted this tendency in a study. Due to congestion and expensive gas fees, Ethereum's dominance in NFTs was dwindling, according to the report.