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According to a new research from NFT data provider Nonfungible.com, sales of nonfungible tokens exceed $17 billion by 2021.
According to the study, which was conducted in collaboration with BNP Paribas-owned research firm L'Atelier, trade in NFTs reached $17.6 billion last year, representing a staggering 21,000 percent increase from the previous year's total of $82 million.
NFTs are tradable assets that keep track of who owns a certain digital item on the blockchain, such as a work of art or a video game character. They made a significant impression on the general public last year.
At a Christie's auction, a token representing a collage by digital artist Beeple sold for a record $69 million, while popular collections such as the Bored Ape Yacht Club have enticed celebrity purchasers ranging from Jimmy Fallon to Snoop Dogg.
"We've witnessed exponential growth over the last year," Nonfungible.com co-founder Gauthier Zuppinger told CNBC.
The total number of NFT transactions estimated by Nonfungible.com in 2021 is lower than some other predictions. Chainalysis, a blockchain analysis firm, previously estimated the figure at high than $40 billion.
According to Zuppinger, this is due to the company's own technique for calculating genuine volumes of NFT trades. Nonfungible.com data excludes transactions involving bots and wash trading, a process in which investors buy and sell an item at the same time in order to artificially increase market activity.
While supporters see NFTs as a vital tool for establishing ownership of digital content, detractors claim the market has attracted exploitative activity. Participants are frequently encouraged to speculate on pricing, and there is evidence that they are increasingly being used for money laundering and other criminal activities.
Change to the'metaverse.'
According to Nonfungible.com's study, users holding or trading NFTs had more than 2.5 million crypto wallets in 2021, up from just 89,000 a year earlier. The number of buyers increased from 75,000 to 2.3 million.
According to the survey, people also became better at making money from NFTs, with investors earning a total of $5.4 billion in earnings on NFT sales last year. According to Nonfungible.com, over 470 wallets made revenues in excess of $1 million.
Collectibles were the most popular category of NFTs, accounting for $8.4 billion in sales. Gaming NFTs like Axie Infinity were the second-largest category, accounting for $5.2 billion in sales.
Later in the year, there was also a change in focus to the so-called metaverse, with sales of digital land and other ventures in the field exceeding $514 million.
The metaverse - planned shared areas in which users may interact with virtual objects and one other — gained traction following Facebook's rebranding to Meta and Nike's acquisition of RTFKT, which develops virtual sneakers.
What comes next?
Zuppinger does not anticipate a significant increase in the aggregate value of NFT transactions this year. Volumes have averaged roughly $687 million each week thus far in 2022, he added, somewhat higher than the $620 million per week average in the fourth quarter of 2021.
"What's interesting is that we're seeing less people, fewer buyers, and fewer transactions," Zuppinger explained.
"The global community may have shrunk as a result of speculation and a decline in collectors interest." However, the worldwide market remains quite high, and the value of some of these assets has continued to rise."
Zuppinger forecasts that more significant corporations and financial institutions will enter the market, while speculative assets will begin to fade. In 2021, a number of major corporations, including Visa and Nike, joined the NFT bandwagon.
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