People walk near the Bored Ape Yacht Club NFT billboard in Times Square on January 25, 2022.
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Sales of incompatible tokens jumped to more than $ 17 billion in 2021, according to a new report by NFT Nonfungible.com.
A study developed with research firm L’Atelier, owned by BNP Paribas, says NFTs trade last year reached $ 17.6 billion, reflecting a jump of 21,000% from $ 82 million in 2020.
NFT is a tradable asset that tracks who owns a certain digital element – say, a work of art or a video game avatar – in a blockchain. They entered the mainstream consciousness last year.
The token, which represents a collage of digital artist Beaple, sold for a record $ 69 million at Christie’s auction, while popular collections such as the Bored Ape Yacht Club lured celebrity buyers from Jimmy Fallon to Snoop Dogg.
“We’ve seen exponential growth over the last year,” Gauthier Zupinger, co-founder of Nonfungible.com, told CNBC.
The number of Nonfungible.com for the total number of NFT transactions in 2021 is lower than some other estimates. Chainalysis’s previous blockchain forecast was more than $ 40 billion.
Zupinger says this is due to the company’s own methodology for measuring legitimate volumes of NFT transactions. Nonfungible.com data excludes bot-related transactions and trading with a car wash, a practice where investors simultaneously buy and sell assets to artificially inflate market activity.
While proponents see the NFT as a valuable way to prove ownership of digital content, critics say the market is attracting predatory behavior. Participants are often encouraged to speculate on prices, and there is evidence that they are increasingly being used for money laundering and other heinous acts.
Transition to the “metaworld”
According to a study by Nonfungible.com, in 2021, more than 2.5 million crypto-wallets belonged to people who hold or trade NFT, compared to 89,000 a year earlier. The number of buyers rose to 2.3 million from 75,000.
According to the report, people also began to make better money on NFT, when last year investors received a total of $ 5.4 billion in revenue from NFT sales. More than 470 wallets managed to make a profit of more than $ 1 million, according to Nonfungible.com.
The most popular category of NFT were collectibles, which sold $ 8.4 billion. Gaming NFTs, such as Axie Infinity, accounted for the second-largest category, grossing $ 5.2 billion in sales.
Later this year, there was also a shift in attention to the so-called metauniverse, sales of digital land and other space projects reached $ 514 million.
The hype around the metaworld – the proposed common spaces where users can interact with virtual objects and with each other – gained enthusiasm after rebranding Facebook to Meta and buying Nike RTFKT, which produces virtual sneakers.
Looking ahead, Zupinger does not expect the total value of NFT transactions this year to rise so sharply. According to him, volumes averaged about $ 687 million per week in 2022, slightly more than the average of $ 620 million per week in the fourth quarter of 2021.
“It’s interesting that we see fewer people, fewer buyers, fewer sales,” Zupinger said.
“The global community may have shrunk due to speculation and a loss of interest in collecting. But the global market is still really high and the value of some of these assets continues to rise.”
Zupinger predicts that larger companies and financial institutions will enter the market, while more speculative assets will begin to disappear. A number of major brands, including Visa and Nike, have jumped on the NFT stepping stone in 2021.