Non-fungible tokens (NFTs) were the hottest topic of 2021, and a new report by industry tracker, NonFungibleTokens, shows how NFT traders turned that hype into major gains, stoking the market into $17.6 billion of total sales—a more than 200-fold increase over 2020.
Sales of NFTs jumped 21,000 per cent to more than $17.6 billion (almost €16 billion) in 2021, up from $82 million (€74 million) a year earlier according to the report from NFT data company Nonfungible.com, developed in partnership with BNP Paribas-owned research firm L’Atelier.
NFTs are unique digital assets, which can be thought of as digital collectibles that include art, gaming, or other creative products that are recorded on a blockchain or digital ledger.
But the market has been criticised for being a bubble and the report shows it is exactly a buyers’ market.
The number of buyers rose almost 2,962 per cent last year, while the number of sellers increased by 3,669 per cent.
Nonfungible.com’s number for total NFT transactions in 2021 is lower than some other estimates. An earlier projection from blockchain analysis firm Chainalysis put the figure at more than $40 billion.
Zuppinger says this is down to the company’s own methodology for measuring legitimate volumes of NFT trades. The Nonfungible.com data rules out transactions involving bots and wash trading, a practice where investors simultaneously buy and sell an asset to artificially inflate market activity.
Last year, a token representing a collage by the digital artist Beeple sold for a record $69 million (€62 million) at the auction house Christie’s.
The most popular category of NFTs was collectibles, which accounted for $8.4 billion (€7.6 billion) worth of sales.
NFT collections like Bored Ape Yacht Club, a collection of 10,000 digital collectibles on the Ethereum blockchain have also spiked in popularity, boasting a 7-day sales volume of $32.2 million (€28 million).
More than 2.5 million crypto wallets belonged to people holding or trading NFTs in 2021, according to Nonfungible.com’s research, up from just 89,000 a year earlier. The number of buyers rose to 2.3 million from 75,000.
People also got better at making money from NFTs, according to the report, with investors generating a total of $5.4 billion in profits from sales of NFTs last year. Over 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 $8.4 billion worth of sales. Gaming NFTs such as Axie Infinity represented the second-largest category, racking up $5.2 billion in sales.
