CoinGecko survey reveals 11 top reasons people buy NFTs
A recent survey jointly conducted by CoinGecko and Blockchain Research Lab and published on April 11th unveils the top 11 reasons why people purchase Non-Fungible Tokens (NFTs). The study reveals that NFT utility tops the list while disrupting the status quo ranks the least important.
Key motivations for NFT purchases
From December 2022 to January 2023, a joint survey conducted by CoinGecko and Blockchain Research Lab examined 343 responses and ranked 11 key factors for purchasing NFTs.
According to the survey’s findings, using NFTs for their intended function was the most important reason, with 77.6% of respondents considering it crucial. Long-term profit came in second, with 76.1% of NFT holders aiming to sell their NFTs at a higher price later on. Gaining a stake in the venture or decentralized autonomous organization (DAO) ranked third, with 72.9% of respondents valuing participation.
Interestingly, all 11 reasons were rated as important to some extent, suggesting that NFT holders consider multiple factors when making buying decisions. See below a brief summary of some of the reasons given by NFT holders.
The survey shows that 3 out of every 4 NFT holders consider the utility and benefits of an NFT collection before purchasing. This demonstrates a desire for NFTs to have more use cases than just digital collectibles.
This expectation aligns with the inherently versatile nature of NFTs. Initially, NFTs had limited utility, mainly functioning as blockchain game items (such as CryptoKitties and Axie Infinity) or profile pictures (like CryptoPunks and BAYC). However, as projects explore and address new use cases, the variety of NFT types continues to expand.
Long-term profits ranked as the second most important reason, with 3 in 4 NFT holders intending to sell their NFTs at a higher price later on.
Besides their distinct applications, NFTs are frequently regarded as artistic expressions, making them an alternative asset for long-term investments. This perception has been particularly reinforced by the rise of renowned blue-chip NFT collections. Moreover, even in the absence of artistic components, NFTs are often sold to generate seed capital, with investors anticipating that project teams will increase the value over time.
Being a part of a venture or DAO
Securing a stake in a venture or DAO ranks as the third primary motivation for purchasing NFTs. A significant 70% of NFT holders are driven by the desire to become stakeholders in the collection they are investing in.
This inclination may stem from their enthusiasm for the community or specific aspects of the project, fostering a deeper involvement with NFT initiatives. However, not everyone shares this perspective; 19.0% of NFT holders remain indifferent to active participation, while 8.2% consider it unimportant.
Community involvement and technology enthusiasm
Becoming part of the community was important for 68.8% of NFT holders, indicating the value of joining a network of fellow owners and project teams. Personal enthusiasm for the technology of the NFT collection was the fourth most important reason, with 7 in 10 NFT holders considering the underlying technology when deciding to buy.
Social good and disrupting established structures
Having a positive social impact was the second least important reason for buying NFTs, with around 6 in 10 NFT holders considering sustainability, philanthropy, and similar societal benefits when evaluating a project. Disrupting established structures or industries was the least important reason for buying NFTs, with almost 6 in 10 NFT holders considering disruption important.
Understanding the NFT market
The CoinGecko survey sheds light on the motivations behind NFT purchases and provides valuable insights for creators, investors, and enthusiasts. By understanding the factors that drive NFT adoption, stakeholders can better navigate the rapidly evolving digital landscape and develop strategies that align with market preferences.
In the ever-evolving world of NFTs, CoinGecko’s report proves that people are as diverse as the digital assets they collect, ensuring that the metaverse will never have a shortage of unique, vibrant, and occasionally head-scratching masterpieces.