Gross sales of nonfungible tokens jumped to greater than $17 billion in 2021, in accordance to a brand new report from NFT information firm Nonfungible.com.
The examine, developed with BNP Paribas-owned analysis agency L’Atelier, stated buying and selling in NFTs hit $17.6 billion final yr, reflecting an eye-watering 21,000% surge from 2020’s complete of $82 million.
NFTs are tradable belongings that preserve observe of who owns a sure digital merchandise — say, a murals, or online game avatar — on the blockchain. They entered mainstream consciousness in a giant method final yr.
A token representing a collage by the digital artist Beeple bought for a report $69 million at a Christie’s public sale, whereas well-liked collections just like the Bored Ape Yacht Membership have lured movie star patrons from Jimmy Fallon to Snoop Dogg.
“We’ve seen exponential growth over the past year,” Gauthier Zuppinger, co-founder of Nonfungible.com, advised CNBC.
Nonfungible.com’s quantity for complete NFT transactions in 2021 is decrease than another estimates. An earlier projection from blockchain evaluation agency Chainalysis put the determine at greater than $40 billion.
Zuppinger says that is down to the corporate’s personal methodology for measuring reputable volumes of NFT trades. The Nonfungible.com information guidelines out transactions involving bots and wash buying and selling, a follow the place traders concurrently purchase and promote an asset to artificially inflate market exercise.
Whereas proponents imagine NFTs to be a precious method of proving possession of digital content material, critics say the market has attracted predatory habits. Members are sometimes inspired to speculate on costs, and there is evidence emerging of their rising use for cash laundering and different nefarious actions.
Shift to the ‘metaverse’
Greater than 2.5 million crypto wallets belonged to individuals holding or buying and selling NFTs in 2021, in accordance to Nonfungible.com’s analysis, up from simply 89,000 a yr earlier. The variety of patrons rose to 2.3 million from 75,000.
Folks additionally bought higher at earning money from NFTs, in accordance to the report, with traders producing a complete of $5.4 billion in earnings from gross sales of NFTs final yr. Over 470 wallets managed to make earnings in extra of $1 million, Nonfungible.com stated.
The preferred class of NFTs was collectibles, which accounted for $8.4 billion value of gross sales. Gaming NFTs similar to Axie Infinity represented the second-largest class, racking up $5.2 billion in gross sales.
There was additionally a shift in focus later in the yr to the so-called metaverse, with gross sales of digital land and different tasks in the house reaching $514 million.
Hype across the metaverse — proposed shared areas in which customers can work together with digital objects and one another — gathered steam after Facebook’s rebrand to Meta and Nike’s purchase of RTFKT, which makes virtual sneakers.
What next?
Going forward, Zuppinger doesn’t expect the overall value of NFT transactions to rise as dramatically this year. Volumes have averaged around $687 million per week so far in 2022, he said, slightly up from an average of $620 million a week in the fourth quarter of 2021.
“What is interesting is that we are seeing less people, less buyers, less sales,” Zuppinger said.
“The global community may have decreased because of speculation and a loss of interest in collectibles. But the global market is still really high and the value of some of these assets has continued to increase.”
Zuppinger predicts more large companies and financial institutions will enter the market, while more speculative assets start to disappear. A number of big brands, including Visa and Nike, jumped on the NFT bandwagon in 2021.