NFTs are promoted by everyone from Justin Bieber to Heidi Klum, yet they are only a fragment of the Cryptocurrency world

NFTs appear to be ubiquitous these days, with celebrities like Justin Bieber and Heidi Klum promoting them, yet statistics show they only represent 1% of the entire cryptocurrency market. According to a study of NFTGo data by crypto information and research firm Messari, nonfungible tokens have a total worth of around $16 billion, a fragment of the nearly $2 trillion ecosystems of thousands of digital assets. Even with some items selling for millions of dollars, this is the case.

“The market may be saturated in some ways, but it may also be modest in comparison to where it will be in a few years,” Mason Nystrom, Messari’s senior research analyst, explained. “I expect this business to develop dramatically over the next five years, and the reason for that is because NFTs can be anything; it’s simply a file standard.”

Surprisingly, avatar NFTs account for over half of the entire value, accounting for 46%. CryptoPunks and Bored Ape Yacht Club are two of the most popular collections, with Serena Williams and Jimmy Fallon among their owners. Some NFTs grant collectors entrance to private social groups, and they are frequently used as social media profile images. Twitter, for example, has added the option for users to connect their digital wallets to the network and show NFTs as their avatars.

Nystrom, who authored a paper based on the data, believes that NFTs with higher utility would gain momentum due to incentives such as cash flows and other monetary rewards, in addition to social worth. At this point, the bulk of the asset class’s earnings comes from selling tokens for a greater price than when they were first purchased.