How Race Is Playing A Major Role In The NFT Boom

Variety and Getwizer joined forces to research the rapid growth of NFTs, who is buying them and what is hot and what’s not in the world of these digital assets.

The world of NFTs has rapidly turned into a billion dollar boom. The crypto-assets exploded in value last year to become a $27 billion business and their value is expected to reach a whopping $80 billion by 2025, according to investment bank Jefferies. With such stellar growth, big brands are quickly getting in on the act with the likes of Taco Bell, Pizza Hut, and Pringles issuing their very own NFTs.

Connecting creators and artists directly with investors, NFTs record ownership of digital files of real-world objects like art, photography, music, jewelry, videos, sport collectables and selfies. But with billions of dollars being spent on NFTs, Getwizer was asked by Variety to find out what all the buzz was about and just who was splashing the cash on these digital assets. 

The research revealed that in July 2021 only 37% of respondents had heard of NFTs and only 11% actually owned one. Reflecting their explosive growth, by January 2022 50% of people had heard of NFTs and 15% said they owned an NFT.

ETHNICITY OF NFTS

However, the big reveal of the research was the ethnicity of those purchasing NFTs. African Americans accounted for 21% of those who owned NFTs, with Hispanics a close second coming in at 20%. However, only 13% of white people have invested in this crypto asset. 

The reason why the African American community is leading the NFT boom is predominately down to culture, according to Brandon Buchanan, founder and managing partner of Meta4 Capital, a crypto-focused investment management firm.

The African American community is “very connected to culture,” Buchanan recently told Yahoo Finance. “If you think about the internet and you think about memes, all you have to do is check the vernacular. Check what’s happening in culture and music,” Buchanan says and you will find African Americans “are on the front foot of that.”

When looking at who is interested in owning an NFT, the research remained consistent with 49% African American and 47% Hispanic respondents saying they would be interested, whereas only 30% of white people expressed interest. 

NFTs and cryptocurrencies can be attractive as they are free from banks and can be transacted anywhere around the world, giving artists from minority communities a way to build a solid source of income.

It should be noted that research conducted among minority populations can tend to display an ‘agreeability bias’ whereby certain cultural groups simply agree with the questions asked. However, while this is well-documented among Hispanics (and certain Asian cultures), there does not appear to be a similar bias noted among African Americans. Overall, research has been consistent in highlighting ethnic minorities holding larger stakes in NFTs, crypto currencies, etc.  

WHAT’S HOT AND WHAT’S NOT

When analyzing the popular NFT categories people are interested in owning, music comes out on top, with music (34%) and music videos (27%) coming in at number one and number two. Video games come second at 30% and art (26%) and photos/pictures (25%) chart at number four and five. Sports trading cards and sports videos are desirable to 19% of respondents, while digital memorabilia is sought after by 17%.

Overall, more than two-thirds of respondents were interested in owning NFTs, with only 30% not interested.

To get a deep dive into the world of NFTs, and learn from NBA All-Star Baron Davis who has become a major player in the crypto-asset to empower underrepresented communities, check out Variety’s webinar powered by Getwizer research here.