The global market for non-fungible tokens reached $ 22bn (£ 16.5bn) this year, as the craze for collections like the Bored Ape Yacht Club and Matrix avatars turned digital images into major investment assets.
NFTs have received warnings from veteran investors similar to those issued on cryptocurrencies: that they are symptomatic of an unsustainable digital gold rush. NFTs confer ownership of a single digital item, whether it is virtual artwork by Damien Hirst or a jacket to wear in the metaverse, on someone, even if that article can be easily copied. The property is recorded on a digital decentralized ledger known as a blockchain.
Data from DappRadar, a company that tracks sales, showed that NFT trade reached $ 22 billion in 2021, compared to just $ 100 million in 2020, and that the minimum market capitalization of the top 100 NFTs ever issued, a measure of their collective value. was $ 16.7 billion.
This year's most valuable NFT sale was The first 5000 days, a digital collage by Beeple, the name used by American digital artist Mike Winkelmann, which was auctioned for $ 69.3 million in March, making it one of the most valuable works of art ever sold by a living artist. Another Beeple NFT, Human, sold for $ 29 million.
Other billionaire NFTs included the Boring monkey yacht club, a collection of 10,000 NFTs depicted as cartoon primates used as profile photos on their owners' social media accounts, raising $ 26.2 million. BAYC's celebrity owners include talk show host Jimmy Fallon and rapper Post Malone.
DappRadar said a key factor in the rise in NFT trading was the entry of major companies into the fray.
Coca-Cola raised more than $ 575,000 selling items like a custom jacket to wear in the metaverse world of Decentraland while Matrix star Keanu Reeves he couldn't keep his face straight when an interviewer told him that his Matrix movie series I now had NFTs attached.
“Hollywood, sports celebrities and big names like Coca-Cola, Gucci, Nike and Adidas made a dent in the space, giving NFTs a new level of exclusivity. The attractiveness of these famous names deeply affected NFTs and the blockchain industry in general, ”said DappRadar.
Soccer fans have been targeted by NFT marketing, including with NFT backed by former England players John Terry and Wayne Rooney, and they have been warned by experts that they are risky, unregulated assets in the UK. It will be years before NFTs behave like a mainstream market, said George Monaghan, an analyst at research firm GlobalData.
“The 2021 NFT activity was hectic. That will decline in the coming years and NFTs will become something more like today's modern art market, where the consensus on value is stronger. That said, it will be years before any cryptocurrency market, much less NFT, looks like something mainstream markets would call stable. He would not invest his emergency fund in any meme NFTs yet, ”he said.
