The market for non-fungible tokens (NFTs) soared to new highs in the second quarter, with sales totaling US$2.5 billion so far this year, up from just US$13.7 million in the first half of 2020, according to marketplace data. A digital asset such as an image, video, or in-game item is represented by an NFT, which is a crypto asset. The owners of NFTs are recorded on the blockchain, allowing them to be traded as a substitute for the digital asset they represent.
After the popularity of NFTs burst early this year, sales volumes have remained strong. In June, monthly sales volumes on OpenSea, a prominent NFT platform, hit a new high. (GRAPHIC: NFT sales on OpenSea reached around US$150 million in June – https://graphics.reuters.com/FINTECH-NFT/DATA/azgvoqjajvd/chart.png) Some NFT collectors regard them as collectibles with intrinsic value due to their cultural significance, while others regard them as investments in which they speculate on growing prices. Since March, buyers have outnumbered sellers by a factor of 10,000 to 20,000 every week, according to NonFungible.com, which aggregates NFT transactions on the ethereum blockchain.
(NonFungible.com – Graphic: Weekly NFT Buyers – https://graphics.reuters.com/FINTECH-NFT/DATA/jbyprzxebpe/chart.png)
Estimates of total sales volume vary according on which NFT transactions are included.
Volumes for the first half of 2021 were just under US$2.5 billion, according to DappRadar, which tracks purchases across several blockchains. NonFungible.com, on the other hand, estimates a number of US$1.3 billion, deducting roughly US$8 billion in “DeFi” (decentralised finance) NFTs. (DappRadar – https://graphics.reuters.com/FINTECH-NFT/DATA/qzjvqxanrpx/chart.png)
(CHART: Weekly NFT Sales Volume – NonFungible.com – https://graphics.reuters.com/FINTECH-NFT/DATA/dgkplrjagpb/chart.png)
Both sites only keep account of sales that take place on the blockchain, or “on-chain” transactions. Parts of some of the largest NFT sales, such as those at auction houses, take occur “off-chain,” which means they must be manually added to the data. A computer image sold for a record US$69.3 million as an NFT at Christie’s in March. Since then, no other NFT sale has come close. A “CryptoPunk” sold for US$11.8 million at Sotheby’s, making it the second most expensive documented NFT auction. (GRAPHIC: The most popular NFTs are sports and collectibles – https://graphics.reuters.com/FINTECH-NFT/DATA/xlbvgqwwyvq/chart.png) Volumes and buyers on the National Basketball Association’s Top Shot marketplace, which allows fans to purchase and trade NFTs in the form of video highlights, have decreased from 403,000 in March to 246,000 in June. After peaking at US$182 in February, the average price of a Top Shot “moment” dropped to US$27 in June. (Source: https://graphics.reuters.com/FINTECH-NFT/DATA/ygdvzznnmvw/chart.png) However, while some NFT kinds lose popularity, others gain popularity. Collectors have flocked to the Bored Ape Yacht Club, a set of 10,000 one-of-a-kind digital ape NFTs. On July 1, the average ape sold for US$3,6000 on OpenSea, up 1,574 percent from the initial price of US$215 in April. According to Yuga Labs, the club’s developers, total purchases have risen to US$61 million. (Elizabeth Howcroft contributed reporting, and Richard Chang edited the piece.)/n
