16 November 2022
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GlobalData: Social media’s herd mentality is fuelling NFT mania

NFT (Non-Fungible Token) has topped Collins Dictionary’s “word of the year” for 2021, showing just how much publicity the digital assets have gained in a short time.

GlobalData’s Social Media Analytics tool showed that mentions of the hashtag “#nft” increased by 3,566 per cent between January and October 2021. The database for Filing Analytics, a leading data and analytics company, also revealed that businesses are following the trend, showing a 20-fold increase in mentions of the keyword “NFT” between 2020 and 2021.

Amrit Dhami, a Thematic Analyst at GlobalData, said that the popularity of NFTs is due to social media propagating a herd behaviour, and unless a real-life use for the technology is invented, the bubble will burst soon.

“…thanks to the herding pressures of social media, users feel the need to keep up with the latest trends flaunted in the posts they follow,” Dhami said.

“Indeed, many popular NFTs originated from widely circulated memes such as ‘Disaster Girl’ and ‘Success Kid’. The monetisation of internet memes is a trend also showcased by the Dogecoin and Shiba Inu cryptocurrencies.

“The hype is propped up by people jumping on the bandwagon and replicating the actions of influencers, celebrities and entrepreneurs. Venture capitalists are massively increasing investment into startups developing NFT collectables.

“NFTs will be perceived as a fad until real-life use cases are developed. Like all market bubbles, it threatens to burst once investors realise the lack of substance,” Dhami added.

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