The volume of sales for Non-Fungible Tokens (NFT) has soared higher in the first half of 2021 after exploding in popularity earlier this year. Currently, the sale value of NFTs in 2021 totals $2.5 billion, which is a considerable leap from the $13.7 million accrued by NFTs back in the first half of 2020.
Q2 2021: NFT Sales Total $2.5B
As a crypto asset that can represent intangible digital files or items, NFT has become hugely popular in 2021. It has become an investable asset, with many buyers speculating on rising prices. In addition, some NFT enthusiasts, are collectibles with intrinsic value because of their cultural significance. Because of the rising popularity, buyers have easily outnumbered sellers every week since March.
DappRadar, which tracks sales across multiple blockchains, said volumes hit just under $2.5 billion for the first half of 2021. But NonFungible.com's figure is $1.3 billion, excluding around $8 billion of DeFi NFTs. However, these platforms only track NFT transactions happening on the blockchain, also referred to as on-chain transactions.
Off-Chain Transactions Raking In Millions
It is to be noted that the record-breaking NFT sales are happening off the blockchain. For example, auction house sales are bringing in the highest bids from collectors and investors and have to be manually added to the data. In March, a digital image sold for a record $69.3 million at Christie's as an NFT. No NFT sale has come close since. The second most expensive known NFT sale was a "CryptoPunk", which sold for $11.8 million at Sotheby's.
Rise And Fall Of Sports Collectible NFTs
The NBA Top Shot uses blockchain technology to reinvent sports collectibles. The Top Shot marketplace allows fans to buy and trade NFTs in the form of video highlights. Since its inception in October 2020, it has done over $230 million in transactions. However, 90% of the earnings happening in January 2021 and the average price of a top shot moment hit an all-time high in February 2021. Following this peak, however, the monthly sales volume of the Top Shot marketplace has experienced a decline. The sales volume has dropped from over 400,000 in March to less than 250,000 in June.
NFT Craze Showing Signs Of Slowing Down
However, it seems that the NFT mania is slowly subsiding as people are not in a rush to buy and trade NFTs. According to Bloomberg, the average price of NFTs has plunged by 67%. From a record high of $4,300 in February 2021, it has dropped to about $1,400.
Ari Paul, CIO of blockchain and crypto investment firm BlockTower Capital, warns that the entire NFT market is in the midst of a bubble, saying,
“It’s simultaneously a bubble and a game-changer, like the internet in 1999 or Bitcoin in 2017. In my opinion, existing NFT valuations are a bubble and total value of all NFTs will be 100x here in 5 years.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.