Asia is poised to surpass the West in NFT

Experts predict that the boom in NFT sales so far this year is just the beginning of what is to come in 2022, when NFT adoption in Asian countries will overtake Western countries.

Sithi Srichawla, CEO of Singapore-based platform and creative studio EAST NFT said:

“I believe that Asia will soon overtake the West in the NFT world. Asian culture has a lot to offer, in every form… and we’ll soon be showing the West what we can do.”

NFT has been booming since late 2020 with the huge success of NBA Top Shot. But Asian consumers have been relatively slow to enter this world – so far.

On the creative side, Asia is developing strongly, with Hong Kong-based Animoca Brands – a $5 billion blockchain gaming company – leading the NFT in the region. In addition to NFT for its own games, Animoca is also a key investor in Axie Infinity, a foray by Synthetic Team-based company Sky Mavis, where NFT is at the core of its play-to-earn (P2E) business model.

Metakovan, a Singapore-based crypto mogul from India, caused a stir in the NFT market last year with a $69 million purchase of a collage by artist Beeple.

But for the Asian public, the reaction to the NFT has been relatively quiet.

While there is not much country data on NFT sales, other proxies suggest that the majority of NFT transactions do not occur in Asia.

Web traffic for the OpenSea NFT marketplace – accounting for over 90% of NFT sales in 2021 – shows that over 60% of visitors are from the US. No Asian country ranks in the top 5, and the fifth-placed country – Canada – accounts for only about 2% of OpenSea traffic. Although there are Asian language NFT markets, their volume is very small compared to OpenSea.

According to Chainalysis, a blockchain analytics firm, the combined regions of Central, South, and East Asia have roughly the same amount of NFT-related traffic as the combined regions of Western Europe and North America, with about 37% of the world’s traffic demand, although Asia has more than four times that has many residents.

But NFT’s customer base is subject to change. Even if the market for cryptocurrencies like bitcoin remains flat this year, NFT looks increasingly explosive – and will most likely be led by clients in Asia.

OpenSea surpassed the monthly record set in August 2021, reportedly posting revenue of more than $4 billion in the first 20 days of January alone dune analysis. In emerging markets, LookRare has done even better, posting $5 billion in sales since its launch on Jan. 10.

Yehudah Petscher, NFT relations strategist at NFT data aggregator CryptoSlam, initially attributed the surge to US buyers but later realized that much of the activity could have been due to solicitation from Asian customers. For example, the PhantaBear NFT collection co-created by Taiwanese pop icon Jay Chou saw seven-day trading volume of 17,194.22 ETH ($53,783,638) last week, beating the record set by Bored Ape Yacht Club (BAYC ) long time kept time.

The global market is likely to continue to change, and it can be difficult to predict when the 4.7 billion people in Asia – almost 60% of the world’s total population – will become NFT users.

“I expect the sales we’re seeing right now will be up 100x. That would be an impressive number,” added Petscher.

In China, the world’s most populous country, cryptocurrency transactions may be illegal, but NFTs are allowed as long as there is a holding period after purchase and they are not immediately resold.

Last week, China’s state-backed blockchain service network (BSN) announced that it would launch its NFT infrastructure later this month. Earlier this month, CryptoPunk #8690 was sold at an auction in Shanghai for 5,232,500 yuan or $823,300. Although the Chinese government requires the purchase and sale of NFTs as “digital collectibles” and prohibits speculation, the sale of the Asian market’s interest in NFTs – unlike Chou’s PhantaBears – shows no obvious ties to Asia.

An industry observer said James Quinn expects lawmakers in the region, including China, to take a softer approach to regulating NFTs because irreplaceable assets – like works of art – are often managed less strictly than fungible assets like currencies and stocks.

“When irreplaceable assets are managed the way they have been… It’s one of the reasons people are excited about NFT because they feel more comfortable in an unregulated environment,” said Quinn, managing partner at Q9 Capital.

But before NFT can find a large audience – whether in Asia or elsewhere in the world – the technology for setting up and using crypto wallets and navigating decentralized finance must become more user-friendly.

“The barrier people face to work with digital assets and cryptocurrencies needs to be lowered. Not everyone can farm all day, or not everyone can play NFT all day, right?” said Quinn.

EAST NFT currently offers a deposit wallet and allows users to buy NFT with credit and debit cards to make the space as user-friendly as possible. Srichawla said his firm believes further growth of the NFT market, particularly in Asia, will depend on how well the general public engages with the technology.

Srichawla believes the real boom in the region will come when the overall market reaches critical mass, giving Asian brands and developers the confidence to invest more in NFT sales – which is expected to take longer than their US and European ones counterparts.

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