Instagram’s adoption of non-fungible tokens (NFTs) could accelerate global adoption of cryptocurrencies. This is stated in a new study by Deutsche Bank, the details of which were reported by CoinDesk.
According to analysts, the social network will simplify the process of buying and selling crypto assets and thus reduce barriers to entry into the market. The strength and visibility of the Instagram brand in the world “will serve to legitimize NFT and destroy the hesitant buying [tokens] among the mass audience.”
Source: India Today
According to the bank, it will become easier to buy and sell NFTs via Instagram and that lowers the barrier to enter this market for new users. Also, Instagram’s high brand awareness means that NFTs may be seen as more legitimate. That can also lower the barrier to entry, says Deutsche Bank.
Furthermore, Deutsche Bank reports that there is a very good chance that the NFT marketplace on Instagram will take off. According to the bank, this Instagram NFT marketplace can even generate a net annual return of $8 billion.
The bank also estimates that other large parties, such as eBay, Snap and Twitter, may also support NFTs in the future. It’s a somewhat curious comment, though, as Twitter already does this to some degree. Twitter added NFT support for the profile pictures on the platform in January.
Furthermore, the bank says that the NFT world is currently in sort of “hypergrowth mode” despite the market cooling down quite a bit at the beginning of this year. The transaction volume of the NFT market increased by no less than 2,500% in 2021 compared to 2020 to $25 billion. The bank estimates that the total market value of NFTs could rise to as much as $1 trillion.
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.
The bank’s report follows on the heels of Morgan Stanley’s related note to clients last month, in which analysts predict the metaverse’s initial TAM in China will be roughly $4 trillion, as it replaces the mobile internet with a more “immersive experience.”
“We expect the metaverse TAM to be expansive and go beyond the current online consumption market, which is mainly dominated by e-commerce and online entertainment spending,” the note said.
Shares of Meta Platforms Inc. (FB) are down 0.69% at $220.28 at the time of publication.
