The wave of hype around non-fungible tokens (NFTs) just won’t break. While it seemed in the spring that the euphoria surrounding non-fungible tokens had died down, NFTs are now more popular than ever. DappRadar puts the market capitalization of the NFT market, plus the NBA topshot, at $14.19 billion. Although the size of the NFT market varies by source, not all purchases are recorded on the blockchain. But most sizes are in the billions.
Blockchain game Axie Infinity in particular is a good example of the hype and success surrounding NFT. Because the game registered over US$2 billion in transaction volume for the first time.
As the chart above shows, NFT led an obscure existence in the crypto market just a few years ago. Few people knew what to do with the term NFT. With this in mind, the volume of transactions in the third quarter of 2020 was still a modest $28 million. Today, in the third quarter of 2021, the situation is quite different: in just one year, sales of NFT artwork have jumped by more than 38,000%. And from the second quarter of 2021 to the third, the volume of transactions increased by $9.4 billion.
NFT sales on OpenSea
The OpenSea platform has established itself as the largest and most important trading platform for non-fungible tokens. The third quarter was the most successful in OpenSea’s history: in August alone, the digital art trading platform achieved sales of over US$3.4 billion. Then in September, there was a slight dip to a trading volume of US$3 billion. Still, it’s an impressive sum. By comparison, Christie’s, one of the most traditional auction houses in the world, achieved “only” a turnover of 5.5 billion US dollars for the whole of 2020.
The increase in OpenSea sales alone from July (US$326 million) to August (US$3.4 billion) is a 943% increase. Even more impressively, OpenSea made just $8 million in revenue in January 2021.
A look at Google Trends can also provide interesting insights into NFT market developments. Ultimately, search volume on Google can also be seen as an indicator of the magnitude of demand for NFT. The blue line represents the search term “NFT”. Red was selected for comparison and represents Ethereum’s search volume. It can be seen that NFT was almost not requested before February 14th. After that, however, the search volume increased. On October 6, the search terms Ethereum and NFT are almost at the same level.
The so-called CryptoPunks are symbolic of the rise and hype surrounding NFT. Limited to 10,000 copies, “Punks” now sell for hundreds of thousands, if not millions, of US dollars. And according to CoinMarketCap, CryptoPunks are the most valuable NFT collection in the world. The chart below shows the price of a CryptoPunk over the past 90 days. The average price of a punk on July 9 was 17.23 Ether ($58,182.6 today). In comparison, the October 6 price was already at 159.5 Ether, an average of $536,027.9 (with an Ether price of $3,376.82).
The Nonfungible.com site provides information about NFT. The graph below shows the number of NFT units sold in the last 30 days. As of January 1, 30-day sales were 80,000 units. More NFTs than ever before were sold, especially in the third quarter.
The table below illustrates the total amount of US dollars spent on NFT purchases. It is also clearly evident here that more US dollars were spent on NFTs in the third quarter of 2021 than in any previous quarter.
The number of active wallets is also at an all-time high on October 5. As of January 1, there were still 18,000 active wallets containing non-fungible tokens. On October 5, the sum of active portfolios was already 155,000. This corresponds to an increase of 761%. Here, too, it is clearly recognizable: From August 2021, the number of active portfolios increased noticeably.
NFT cheaper than expected
Even though CryptoPunks makes everything in the NFT market seem utopian and expensive, Reuters comes to a different conclusion. As the following chart shows, the majority of non-fungible tokens can be bought at a price of 0 to 10,000 US dollars. So the $1 million CryptoPunks or the $69 million Beeple artworks are the exception rather than the norm.
Above all, it should be noted that NFTs have never been more popular than in the third quarter of 2021. Whether this is just a short-lived hype remains to be seen. Or if you can really trust the NFT market to be valued at a trillion US dollars.
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