Although the term fintech encompasses various technologies, there’s no denying that cryptos, NFTs, and DeFi have taken the industry by storm in recent years. NFTs, in particular, seem to be the latest trend, especially in a world that is preparing for a new internet age: Web 3.0
2021 was by far the best year for fintech, and NFT startups seem to have gotten the bulk of funding. Data compiled by CryptoMonday shows that investment in NFT startups increased from $44 million in 2020 to $2.2 billion in 2021. That’s an increase of more than 49 times.
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NFT startup investments soared
NFT startups saw the highest increase in venture capital funding among all other fintech trends. Crypto exchanges followed in second place, with funding increasing 16-fold from 2020 to $7.3 billion. One of the latest trends is online installment purchases, which is also known as Buy Now Pay Later (BNPL). BNPL startups saw the smallest increase in funding, increasing only 2.7-fold.
Other fintech trends that saw an increase in funding include crypto custody and growth capital, each of which saw a funding increase by 6.2 times. Alternative Investmens, funds that do not rely on traditional financial products such as stocks, bonds, mutual funds, or other listed securities, saw a 4.9-fold increase. Open banking increased 4.6 times.
Although payments still lead in funding, crypto and DeFi are catching up fast. The crypto and DeFi sector saw the largest growth. The sector grew 310% year-over-year.
We can safely assume that this growth will be even higher as the crypto and DeFi scene is still largely unexplored and more people are coming on board every day.
NFTs are flourishing in the art and music scene
Interest in the NFT markets surged after Christie’s March 2021 auction. American digital artist Beeple sold an NFT collection for nearly $70 million, making history as the third most expensive artwork ever sold by a living artist.
The sale definitely caused a stir and caught the attention of crypto enthusiasts. Especially in the art and music industries, digital tokens are particularly useful for determining ownership and ensuring that artists receive their royalties. For this reason, big names in the entertainment industry, like Snoop Dog, have taken the plunge into NFTs and launched their own collections.
The wave of NFTs is also being driven by big companies getting on board. In 2021, established brands like Adidas, Nike, and McDonald’s experimented with NFTs. We don’t expect any slowdown in 2022 either, as more brands look for ways to jump on the wave.
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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