Non-fungible tokens (NFTs) have made global headlines in 2021 with a series of high-priced auctions. Still, for most people, the mechanics behind these crypto-collectibles remain somewhat befuddling. While a few of the more avant-garde concepts making up all things blockchain create real hurdles for global participation, a number of brave pioneers have learned to embrace NFTs as a modern investment vehicle.
Nowhere on Earth have NFTs gained so much traction as they have in Southeast Asia. From the Philippines to Vietnam, the region leads the world when it comes to the adoption of this exciting technology. And thanks to new insights uncovered by Finder’s Global NFT Adoption Report, the trends behind this locality’s demographics have become much clearer.
So, what are NFTs anyway? And how are artists helping expand awareness in the region? This guide to NFT adoption sheds light on the growth of this unique phenomenon and the future ambitions of Southeast Asian artist communities.
What are NFTs?
In simplest terms, NFTs are unique, cryptographically produced virtual assets. They are often represented by artworks, music or digital collectibles.
Where most cryptocurrencies are made of interchangeable tokens, no two NFTs are exactly alike. In fact, their individual characteristics are what give NFTs their “non-fungible” moniker. As each NFT has a separate value from the next, they aren’t likely to be utilised as a traditional means of exchange. Still, like most collectibles, their tradable nature adds to their global appeal.
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It’s important to note that it is not necessarily the visible portion of the NFT that you’re actually buying. After all, anyone with a computer can copy and paste a jpeg from that digital artwork you’re interested in. Instead, the important part of your purchase is contained in the metadata, recorded on the token’s associated blockchain and denoting its originality – along with your ownership. With this data conferred upon the blockchain, only a verified owner can sell their newly acquired NFT.
However you choose to think of them, there is no denying the real-world value NFTs have created. And as awareness of the technology expands, the growth of this nascent market has absolutely skyrocketed.
Market growth
To fully grasp the significance of NFTs, you only need to consider the magnitude of sales that have occurred. The following statistics really put this market in perspective:
In terms of overall transactions, the NFT market grew nearly tenfold between 2018 and 2020 – a conservative estimate by any standard. Beginning the first week of September 2020, over US$1 million of NFTs have been traded in every seven-day period since. After May 2021, that weekly total has jumped between US$10 million and US$20 million per week.
These figures become even more dramatic when we expand the timescale. Did you know that NFT sales surpassed US$10 billion in the third quarter of 2021? That figure is nearly eight times higher than the previous quarter and roughly 18,000 per cent higher than the first quarter of 2020.
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But don’t let these numbers make you feel like you’ve missed out on the trend – you really haven’t. While individual NFTs have made numerous headlines with their multi-million-dollar sales, it’s interesting to note that the majority of these assets still sell for less than US$200. This relatively low entry price has helped NFTs become a suitable investment for a large number of people in Southeast Asia.
Southeast Asia NFT adoption
Southeast Asia isn’t new to NFTs. Back in 2020, Statista ranked the adoption rates of Vietnam, the Philippines and Thailand as second, third and fifth, respectively, out of 55 surveyed countries.
In 2021, the region has further solidified its standing. Four of the top five countries adopting NFTs are now in Southeast Asia, according to a recent Finder study.
With 32 per cent of people owning NFTs, adoption rates in the Philippines now rank as the highest in the world. Thailand and Malaysia rank second and third, while Vietnam takes the fifth spot. When combined, the adoption rates of these four countries average 25 per cent of survey respondents. This rate is more than twice the global average of 10.2 per cent.
Interestingly, the study also measured the awareness of its respondents. Not surprisingly, three of the top five countries exhibiting the highest awareness of NFTs were also in Southeast Asia. Averaging nearly 50 per cent of all participants, the awareness of NFTs as an investment vehicle in the Philippines, Thailand and Malaysia correlates strongly with the growing adoption rates seen in these countries.
Finally, the forecasted NFT adoption rates of Southeast Asian countries show the potential for continued growth in the region. Between participants already owning NFTs and those planning on purchasing them in the future, the forecasted growth of NFT adoption in Southeast Asia tops the global average by more than 10 per cent.
Also Read: How NFT is bringing ownership of digital assets back to content creators
The next hub
Year after year, surveys find Southeast Asian traders to be increasingly important players in the NFT space. But despite increased adoption of the technology, hurdles still exist for potential investors in the region.
Without onboarding information made available in local languages, for example, a significant barrier to awareness has already been established. To help with this and other pain points related to future adoption, digital artists are now building communities, like MetaRupa, to foster education related to NFTs.
Play-to-earn games such as Axie Infinity are also influencing increased participation. And with a series of crypto art events, such as Art Moments Jakarta, Art Fair Philippines and CryptoArt Week Asia spreading awareness throughout the region, the future for increased adoption looks bright.
Only time will tell if forecasted ownership here pans out as predicted. Nevertheless, when considering past growth as an indicator for future potential, the trend lies front and centre before a global audience. By and large, Southeast Asia is set to become a future hub for NFT marketplaces.
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