Coin Desk - Will Canny
28 Mar 2022
Instagram could lower the barrier for entry to the NFT market, the report said.
Bringing non-fungible-tokens (NFTs) to Instagram’s large audience has the potential to supercharge the overall market going mainstream, Deutsche Bank said in a research report on Sunday.
Earlier this month, Meta Platforms (FB) CEO Mark Zuckerberg said that the company was “working on bringing NFTs to Instagram in the near term.”
Instagram will simplify the process of buying and selling NFTs, thereby lowering the barriers to entry, the bank said, adding that the platform’s strong global brand recognition will “lend itself to legitimatize NFTs, which could serve to erode buying hesitancy across the company’s broader audience.”
NFTs are digital assets on a blockchain that represent ownership of virtual or physical items and that can be sold or traded.
The launch of an NFT marketplace on Instagram, which is owned by Meta, is highly likely to gain traction, the report said. Based on typical NFT marketplace fees and conservative assumptions about user penetration and average transaction values, the bank estimates that a broader rollout of an NFT marketplace on Instagram could drive up to $8 billion in net annual revenue.
Other internet companies are also taking steps to adopt digital assets, as eBay (EBAY), Twitter (TWTR) and Snap (SNAP) could all incorporate NFTs to some degree, the note said.
The NFT market is in “hypergrowth mode,” the report said, generating around $25 billion in transaction volume last year, an increase of about 250 times from the total volume of around $95 million seen in 2020.
Deutsche Bank says the market opportunity for NFTs is very large, with the total addressable market (TAM) estimated to be over $1 trillion, led by such categories as art, collectibles and gambling.