NFT Trading Exceeds $17 Billion In 2021
Nonfungible.com, a Canadian analytics specialist, recently published a report that has caught the attention of NFT and crypto investors. According to the analytics specialists, the aggregate trading volume of NFTs amounted to nearly $18 billion in the year gone by. NFTs were all the rage in 2021 thanks to mainstream media hopping onboard, endorsements from celebrities such as Jimmy Fallon, social media influencers and even some corporations.
Breaking Down The Numbers
Rewind to 2020 and NFTs were merely considered to be a niche of sorts, amassing only $82 million worth of trading volume. NFT popularity soared in the spring of 2021 after Beeple’s digital creations sold for nearly $70 million at auction. Take a close look at the monthly sales of NFTs on the OpenSea market and you’ll find they were relatively flat between September and January of 2021 then jumped all the way up to nearly $100 million in February and nearly $150 million in March.
Though the monthly sales volume of NFTs on OpenSea dipped down below $100 million in April, they jumped right back up to more than $140 million in May and June. Some industry experts point to the spike in popularity of collectibles including trading cards during the pandemic as part of the reason why the NFT market exploded. People love collecting things, especially if they are rare. Each NFT is an idiosyncratic digital artwork, meaning it can only have one owner as identified by the blockchain.
Will The NFT Market Continue To Skyrocket?
Though no one can predict the future, there is the potential for NFT activity to diminish simply because fewer buyers are interested in buying the items. The speculation over the digital artworks is slightly declining as the pandemic winds down. However, even if the NFT community shrinks, it has the potential to continue growing in aggregate value, albeit at more of a tempered pace. Alternatively, there is also the potential for the market to simply stagnate.
Those who own NFTs and those interested in buying or trading them will be comforted by the fact that the average daily trading volumes for these digital artworks have held steady. In other words, NFTs are likely here to stay.
We would be remiss not to mention the fact that big-name investors are pouring cash into NFTs. As an example, OpenSea, a power player in the NFT space, recently hit a total valuation in excess of $13 billion as result of the outpouring of support from high-profile investors. As an example, Snoop Dogg recently purchased valuable NFTs from the Bored Ape Yacht Club.
Additional Numbers Of Note
Though the NFT market’s hike of 21,000% probably won’t be replicated in the years moving forward, there is still plenty of opportunity to make money from NFTs. Sort through the numbers and you will find NFTs generated nearly $5.5 billion in profits across 2021. Even if NFT activity regresses to the mean in the year ahead, that does not preclude investors from adding to their net worth with these digital artworks. NFTs will function as tradable assets that hold considerable value for the foreseeable future or even indefinitely.
It must be noted that the data provided by Nonfungible.com excludes transactions pertaining to wash trading and bots. Wash trading is a practice investors use to buy and sell NFTs at the same time to artificially boost activity and value. Fast forward to the years ahead and it is quite possible that the NFT market will prove even more active simply because the seemingly inevitable transition to the metaverse will provide new opportunities for the buying, selling and trading of these digital artworks.