According to a recent whitepaper published by Visa. The company’s entry into the NFT market motivated by a review of the underlying technology. And it’s potential as a “promising medium for fan engagement.”
Nonfungible tokens cited in the Aug. 23 publication as a key innovation during the pandemic, when strict shelter-in-place orders restricted live sports, entertainment, and music festivals. Fans are eager to join digital communities centered around their favorite artists or sports teams. And NFTs are emerging at a time when they are eager to do so.
Professional sports were particularly hard hit by the pandemic, with major leagues worldwide losing an estimated $18 billion in revenue. This reinforces the “need to diversify revenue and focus on technology to reposition businesses for growth opportunities. And to capture the attention of fans,” according to Visa.
“NFTs appeal to collectors, fans, teams, leagues, and talent,” according to the report. NFTs, in particular, have the potential to be important sources of fan engagement, customer relationship management, and new revenue streams. Collectibles, art, and gaming were the three most common NFT use cases identified.
A whitepaper released
The whitepaper released in conjunction with Visa’s announcement. That it had paid $150,000 for its first NFT, CryptoPunk 7610. CryptoPunks is a collection of 10,000 unique NFTs stored on the Ethereum network with proof of ownership. According to industry sources, 2,519 CryptoPunk collectibles sold in the last 30 days, netting a total of $467.4 million. The highest-grossing sale during that time was CryptoPunk 7252, which sold for 1,600 ETH ($4.5 million).
NFTs are also gaining popularity in other niches outside of the CryptoPunk craze. Total NFT sales expected to exceed $900 million in August, setting a new high for the industry. The previous high set in May when total NFT sales totaled $255 million. Crypto markets hit new all-time highs in May before undergoing a multi-month correction.
Given Visa’s growing focus on digital assets, the company’s move into NFTs is unsurprising. In the Asia-Pacific region, the company recently signed an agreement. With digital asset platform Zipmex to provide more crypto payment integration. This year, in January, In order to support the digital asset class. Visa reaffirmed its commitment to developing cryptocurrency payment and fiat on-ramps.