The global market for non-fungible tokens has reached $22 billion (£16.5 billion) this year as the frenzy of groups such as the Bored Ape Yacht Club and Matrix avatars has turned digital images into a major investment asset.
NFTs have drawn warnings from seasoned investors similar to those issued about cryptocurrencies: a symptom of an unsustainable digital rush for gold. NFTs give ownership of a unique digital object – whether it’s a file virtual piece of art by Damien Hirst or a jacket to be worn in the metaverse – on someone, even if that item could easily be copied. Ownership is recorded on a decentralized digital ledger known as a blockchain.
Data from DappRadar, a company that tracks sales, showed that trading in NFTs reached $22 billion in 2021, compared to just $100 million in 2020, and that the market bottom line for the top 100 NFTs ever issued — a measure of their collective value — was $16.7 billion.
The NFT sale was the most valuable this year first 5000 days, a digital collage designed by Beeple, the name used by American digital artist Mike Winkelman, auctioned for $69.3 million in March, making it one of the most valuable pieces of art ever sold by a living artist. Beeple post NFT, one person, sold for $29 million.
Other multimillion dollar NFTs included boredom monkey yacht club, a group of 10,000 NFTs represented as lead animations used as profile pictures on their owners’ social media accounts which raised $26.2 million. Celebrity owners of BAYC include talk show host Jimmy Fallon and rapper Post Malone.
DappRadar said one of the key factors in increasing NFT trading is the entry of mainstream firms into the fray.
Coca-Cola raised more than $575,000 selling merchandise such as a jacket meant to be worn in the Metaverse in Decentraland while Matrix star Keanu Reeves was Fail to keep a straight face When an interviewer told him that his file The Matrix movie series Now NFTs attached to it.
“Hollywood, sports celebrities and major brands such as Coca-Cola, Gucci, Nike and Adidas are making their impact in the space, introducing NFTs to a new level of exclusivity. The pull of these iconic names has significantly impacted NFTs and the blockchain industry in general,” said DappRadar.
Football fans have been targeted by NFT marketing – including with NFTs backed by former England players John Terry and Wayne Rooney – and experts have warned them they are a risky and unregulated asset in the UK. It will take years before NFTs behave like a traditional market, said George Monaghan, an analyst at research firm GlobalData.
“The 2021 NFT activity has been frenzied. That will subside in the coming years and NFTs will settle into something akin to today’s modern art market, where the consensus on value is much more solid. However, it will be years before any crypto market, let alone an NFT, becomes available. Similar to anything you might call traditional markets stable. I wouldn’t be throwing rainy day money into any NFTs meme yet,” he said.
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