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Survey: Consumers Think NFTs Are Getting Riskier

The ongoing “crypto winter,” which has seen cryptocurrency values ​​plunge from 2021 highs, has hurt consumer perceptions of NFTs.

Exclusive research from VIP+ partner consumer insights firm GetWizer on “The Demographic Divide,” a special report exploring changing attitudes in media and technology, found that non-fungible tokens are now perceived differently by the public just six months ago, before the cryptocurrency crash.

Most NFT markets used cryptocurrency as a payment mechanism, which exposed them to market downturns, evaporating the value of many collections. This has had a big impact on how those familiar with NFTs perceive their risk levels.

In January 2022, GetWizer discovered that 28% of those who knew about NFTs considered them a bad investment. This increased by 16 percentage points to 44%, while the percentage believing NFTs are a good investment decreased by 9 percentage points, from 37% to 28%.

More than a quarter of those familiar with NFTs still consider them a good investment. Perhaps unsurprisingly, this is driven by those who own NFTs, with two-thirds positive towards their prospects and only 1 in 20 considering them a reckless investment.

It’s markedly different among non-NFT owners, with more than half of negative NFT reviews offering long-term value and only 15% viewing them as good investment opportunities.

Awareness of NFTs has grown rapidly over the past 12 months. When VIP+ first conducted this study, nearly two-thirds of US residents age 15 or older were unaware of NFTs. It’s down to 43% now. Ownership, however, has fallen slightly over the past six months (from 15% to 13%) but remains higher than a year ago (10%).

Belonging is strongest among 15-29 year olds. One in four said they own an NFT, and they are the only age group that hasn’t seen a decline since the start of the crypto winter.

As VIP+ previously noted, NFT values ​​have fallen given that most are cryptocurrency-related. This had a large impact on the total value of NFT’s monthly sales as measured by Cryptoslam, with July’s tally of $647.2 million, the lowest monthly total since June 2021. Sales in April, at just three months earlier ($3.7 billion), were 5.7 times higher. .

However, it is important to note that the total number of transactions per month tells a very different story. Sales may be down sharply, but trades are not. In July, 5.6 million NFT transactions were made on measured blockchains, up slightly (0.46% or 25,800) from June, with the number of transactions in April being just 1.1 times higher than in July, a difference well below sales.

Market volatility has impacted how the public perceives the overall stability of NFTs. While a majority (59%) still believe they will exist in five years, that figure fell from 71% just six months earlier, in January.

It also hurt the consideration that cryptocurrencies should be used to pay for NFTs. Although not a majority consensus in January, when 42% agreed, it fell following a minority opinion among consumers, now with a third believing it is important that the cryptocurrency be the sole source of payment for NFTs.

The perception of NFTs as a technology that will change art and entertainment has also slipped, with less than half of those familiar with NFTs now seeing them as having the ability to do so.

That sentiment hasn’t changed much among NFT owners, who remain optimistic. But it’s the opinion of those who are aware but not yet owners – the potential growth market for NFTs – that is most important to consider. With so many entertainment companies stepping up their NFT plans, finding ways to assuage the concerns of the growing end of the market is essential.

This could be achieved by a number of different strategies. Demonstrating the utility that NFTs can offer and shifting the popular perception from possible to scam to useful technology is one. Exploring free drops, whether that’s inserting QR codes into programming like Discovery did with “Shark Week” or rewarding viewers for watching anytime is another.

NFTs are at a pivotal moment in consumer consciousness. Technology can offer many things, but the bursting of the NFT value bubble has seen many see them as nothing more than a waste of capital. Now is a great time for entertainment companies to introduce NFTs that offer utility – instead of speculative investment options – and change public perception for good.

More VIP+ on NFTs

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NFT Entertainment Market Status [VIP+ Webinar]: Discussion with industry leaders on what the NFT entertainment landscape looks like and what we can expect in the near future

NFT Opportunities for Entertainment Companies: Do’s and Don’ts for Entertainment Companies Looking to Enter the NFT Space

NFT Activity in the Entertainment Industry – Who Does What: Analysis of NFT strategies for major entertainment companies and what drives them to get started

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NFT + Sustainability [VIP+ Webinar]: Industry experts step in to create carbon-neutral Web3 platforms

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Two impending battlegrounds for NFTs: Why NFTs must move away from cryptocurrency to achieve mass adoption and the schism it can cause – and why entertainment doesn’t fully embrace decentralization

How NFTs will disrupt games and music in 2022: Main developments to be expected within the industries

NFT + Entertainment: VIP+ Subscriber Reporting on Potential Hollywood Non-Fungible Token Offering


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