Business
The market for non-fungible tokens (NFTs) surged to new highs in the second quarter, with US$2.5 billion in sales so far this year, up from just US$13.7 million in the first half of 2020, marketplace data showed.
FILE PHOTO: Pixel art image of the Cryptopunk #7523 non-fungible token (NFT) collectible created in 2017 is pictured in this handout obtained May 31, 2021. Courtesy of Sotheby’s/Handout via REUTERS
LONDON: The market for non-fungible tokens (NFTs) surged to new highs in the second quarter, with US$2.5 billion in sales so far this year, up from just US$13.7 million in the first half of 2020, marketplace data showed.
An NFT is a crypto asset, representing an intangible digital item such as an image, video, or in-game item. Owners of NFTs are recorded on blockchain, allowing an NFT to be traded as a stand-in for the digital asset it represents.
Sales volumes have remained high after NFTs exploded in popularity early this year. Monthly sales volumes on OpenSea, a major NFT marketplace, reached a record high in June.
(GRAPHIC: NFT sales on OpenSea near US$150m in June – https://graphics.reuters.com/FINTECH-NFT/DATA/azgvoqjajvd/chart.png)
Some NFT enthusiasts see them as collectibles with intrinsic value because of their cultural significance, while others treat them as an investment, speculating on rising prices.
Buyers have mostly totalled 10,000 to 20,000 per week since March, outnumbering sellers, according to NonFungible.com, which aggregates NFT transactions on the ethereum blockchain.
(GRAPHIC: Weekly NFT buyers – NonFungible.com – https://graphics.reuters.com/FINTECH-NFT/DATA/jbyprzxebpe/chart.png)
Total sales volume estimates vary depending on which NFT transactions are included.
DappRadar, which tracks sales across multiple blockchains, said volumes hit just under US$2.5 billion for the first half of 2021. But NonFungible.com’s figure is US$1.3 billion, excluding around US$8 billion of “DeFi” (decentralised finance) NFTs.
(GRAPHIC: NFT sales volume hits record high in Q2 – DappRadar – https://graphics.reuters.com/FINTECH-NFT/DATA/qzjvqxanrpx/chart.png)
(GRAPHIC: Weekly NFT sales volume – NonFungible.com – https://graphics.reuters.com/FINTECH-NFT/DATA/dgkplrjagpb/chart.png)
Both sites only track sales which occur on the blockchain, also known as “on-chain” transactions. Some of the biggest NFT sales, such as those at auction houses, have part of the transaction take place “off-chain”, meaning they must be manually added to the data.
In March, a digital image sold for a record US$69.3 million at Christie’s as an NFT. No NFT sale has come close since. The second most expensive known NFT sale was a “CryptoPunk” which fetched US$11.8 million at Sotheby’s.
(GRAPHIC: Sports and collectible NFTs are most popular – https://graphics.reuters.com/FINTECH-NFT/DATA/xlbvgqwwyvq/chart.png)
The U.S. National Basketball Association Top Shot marketplace, which allows fans to buy and trade NFTs in the form of video highlights, has seen volumes shrink and buyers drop to 246,000 in June from 403,000 in March. The average price of a Top Shot “moment” slumped to US$27 in June, after peaking at US$182 in February.
(GRAPHIC: NBA Top Shot sales fall – https://graphics.reuters.com/FINTECH-NFT/DATA/ygdvzznnmvw/chart.png)
But as some NFT types become less popular, others take off.
The Bored Ape Yacht Club, a set of 10,000 unique digital ape NFTs, has become a hit among collectors. The average ape sold on OpenSea as of July 1 for US$3,6000, up 1,574per cent from the launch price of US$215 in April. Total sales have jumped to US$61 million, according to the club’s creators, U.S.-based Yuga Labs.
(Reporting by Elizabeth Howcroft; Editing by Richard Chang)
