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Metaverse and NFT Hype Cycle Is Over: What to Expect in 2023?

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A new report by Activate Technology reveals that the non-fungible token (NFT) and metaverse hype is over, and that both sectors will need targeted corporate interest going forward.

The future holds new use cases for NFTs to aid companies in building brand loyalty, while the metaverse will need sustained corporate development.

NFT use will change to community-building

According to new report released by the company, NFTs have gone past their peak bubble. Accordingly, the hype surrounding the space will gradually decrease.

NFTs will become mature products, with blockchain and Web3 driving greater utility for the tokens. Companies will also capitalize on the space to build communities around their brands. Buyers will also benefit from a sense of belonging.

Starbucks is already offering the Starbucks Odyssey experience that uses NFT collectible stamps that will give owners access to unique coffee experiences.

Additionally, the report revealed the shift in the demographics of current NFT market participants. It defines participants as those who “researched, discussed, browsed, bid on, purchased, displayed, sold, or created NFTs in the last 12 months.”

The number of U.S. participants increased from 12% in 2021 to 18% in 2022. Still, less than one-third of the U.S. population is still unaware of what NFTs are. Forty-three percent of NFT participants came from affluent households with incomes of $100K or more.

Metaverse NFTs
Source: Activate Technology

NFT sales in primary and secondary marketplaces, excluding LooksRare, have exceeded $23B in 2022. Most NFT owners are now buying them for display on social media and collections. This is unlike earlier in the NFT cycle, when people bought and traded NFTs as speculative investments.

Only 51% of adults 18 years or older bought them as investments in 2022,
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