NFT Market Generated over $23 Billion in 2021
JPEGs assemble for tens of millions of dollars, auction houses selling blockchain-based works and accepting cryptocurrency for payment, fashion brands release digital items… 2021 will undoubtedly be in the annals of cryptography as the year of the NFT. According to DappRadar, the still-emerging market of uncontrolled tokens had its best year ever, generating more than $23 billion in trade – a frenzy from less than $100 million registered last year.
The Lithuania-based blockchain analytics company, which tracks more than 30 networks that support decentralized applications, estimates that the number of unique active wallets engaging with NFTs on a daily basis went up from 5,000 in the beginning of the year to around 140,000 at year’s end.
Venture capital investors now value the industry’s dominant marketplace, OpenSea, at a reported $10 billion, all the while minting new unicorns in the category. And that’s just the tip of the iceberg.
Let us summarize some of the factors that led to the explosive growth of the industry this year:
Celebrities: Paris Hilton, Eminem, Naomi Osaka, Tom Brady… name a celebrity who hasn’t been a part of the NFT in the last 12 months. From simply buying these assets to launching their own specialized platforms, the rich and famous have helped to pave the way for the digital collection to get into the mainstream.
Brands have also invaded this space massively. Luxury fashion houses such as Gucci, D&G, and Burberry introduced their first virtual wear; VISA bought one of the 10,000 24×24 pixel images of CryptoPunks NFT, fixing its blue chip status, and Nike went to buy virtual sneakers and a collectible startup, and these are just a few!
Auction houses, including Christie and Sotheby, embraced digital art and began accepting cryptocurrencies for payment. In March, digital artist Mike Winkelmann, known as Beaple, joined the club of the world’s most valuable living artists when his symbolic work “Everydays – The First 5000 Days” was sold for $69 million.
While decentralized financial applications remained a hot topic in the first half of the year, blockchain games or so-called GameFi (due to the financialization of video games) quickly collected more users than their homogeneous categories. According to DappRadar, wage-to-wage games, many of which use NFT, now account for 51% of the industry’s use, while DeFi accounts for 37%.
The hype, particularly around GameFi, lured venture capital investors, who poured an estimated $4 billion in the category.
Finally, in the wake of Facebook’s rebranding to Meta, the value of metaverse-related projects soared. Blockchain virtual worlds like The Sandbox and Decentraland generated over $500 million in trading volume and reached a market cap of $3.6 billion.
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