People walk past a Bored Ape Yacht Club NFT billboard in Times Square on January 25, 2022.
Noam Galai | fake images
Non-fungible token sales surged to more than $17 billion in 2021, according to a new report from data firm NFT Nonfungible.com.
The study, developed with BNP Paribas-owned research firm L’Atelier, said NFT trade reached $17.6 billion last year, reflecting a whopping 21,000% increase from the total of $82 million. of 2020 dollars.
NFTs are tradable assets that keep track of who owns a certain digital item, for example a piece of art or a video game avatar, on the blockchain. They entered the mainstream consciousness in a big way last year.
A tile depicting a collage by digital artist Beeple sold for a record $69 million at a Christie’s auction, while popular collections like the Bored Ape Yacht Club have attracted celebrity buyers from Jimmy Fallon to Snoop Dogg.
“We’ve seen exponential growth over the past year,” Gauthier Zuppinger, co-founder of Nonfungible.com, told CNBC.
Nonfungible.com’s number for total NFT transactions in 2021 is lower than some other estimates. An earlier projection by blockchain analytics firm Chainalysis put the figure at more than $40 billion.
Zuppinger says this is due to the company’s own methodology for measuring legitimate NFT transaction volumes. The Nonfungible.com data rules out transactions involving bots and wash trades, a practice in which investors simultaneously buy and sell an asset to artificially inflate market activity.
While proponents believe NFTs are a valuable way to prove ownership of digital content, critics say the market has attracted predatory behavior. Participants are often encouraged to speculate on prices, and evidence is emerging of their increasing use for money laundering and other nefarious activities.
Switch to the ‘metaverse’
According to research from Nonfungible.com, more than 2.5 million crypto wallets were owned by people holding or trading NFTs in 2021, compared to just 89,000 the year before. The number of buyers increased from 75,000 to 2.3 million.
People also got better at making money from NFTs, according to the report, with investors making a total of $5.4 billion in profit from NFT sales last year. More than 470 wallets managed to make profits in excess of $1 million, Nonfungible.com said.
The most popular category of NFTs was collectibles, which accounted for sales of $8.4 billion. NFTs for games like Axie Infinity represented the second largest category, amassing $5.2 billion in sales.
There was also a shift in focus later in the year to the so-called metaverse, with digital land sales and other projects in the space reaching $514 million.
The hype around the metaverse (proposed shared spaces in which users can interact with virtual objects and each other) gathered steam after Facebook’s rebranding to Meta and the purchase of RTFKT by Nike, which makes sneakers. virtual.
Going forward, Zuppinger does not expect the total value of NFT transactions to rise as dramatically this year. Volumes have averaged about $687 million a week so far in 2022, she said, up slightly from an average of $620 million a week in the fourth quarter of 2021.
“What’s interesting is that we’re seeing fewer people, fewer buyers, fewer sales,” Zuppinger said.
“The global community may have slowed down due to speculation and loss of interest in collectibles. But the global market is still very high and the value of some of these assets has continued to rise.”
Zuppinger predicts that more large companies and financial institutions will enter the market, while more speculative assets will begin to disappear. Several big brands, including Visa and Nike, jumped on the NFT bandwagon in 2021.