NFT sales reached $17bn in 2021, says report

By Raffaele Redi

New data confirms that the NFT market was certainly booming in 2021

NFT artworks in a virtual gallery                                 
Average NFT prices skyrocketed by a factor of 16 in 2021, rising from around $49 to over $807 – Photo: Shutterstock
                                

The overall NFT market jumped in value to over $17bn in 2021, according to a new report from NFT data company Nonfungible.com.

According to the study, which was carried out in association with BNP Paribas-owned research firm L’Atelier, NFTs’ trading volume hit $17.7bn last year, reflecting a 21,350% surge from 2020’s total of $82m, while the market cap increased by 4,400% to $16.8bn.

However, two key indicators reflected a shift in the market, with financial speculation – that is, buying NFTs to sell them – prevailing over simple collecting, creating an inflationary trend.

As average NFT prices rose 16-fold from around $49 to over $807, the average number of transactions declined over the period by around 5%, with the average length of ownership dropping by 69% in 2021.

“At the end of 2021, we are up against a market that was more than ever subjected to excessive speculation, with new, inexperienced buyers and risk-taking increasingly less restrained. Throw into the mix an almost infinite proliferation of projects with relatively low added value, contributing to market saturation and raising suspicion about the real added value and potential of NFTs,” said the researchers.

Buyers overtake two million

It came as no surprise that profits on secondary sales increased to a whopping $5bn, as losses on resales also rose to $667m, up from around $1.9m in the previous year.

On the other hand, the total number of buyers reached 2.3 million in 2021 – a huge increase from 75,144 in 2020 – while sellers amounted to around 1.2 million by the end of last year after a 3,700% increase.

Finally, the number of active wallets also hit the 2.5 million figure in 2021, compared to just over 89,000 in 2020.

Ethereum dominant

Despite an ongoing proliferation of new networks and technological solutions, Ethereum remained by far the most important blockchain for NFT transactions in 2021, with 76% of the entire market.

According to the report, the Ronin blockchain, which powers the Axie Infinity NFT game platform, also became a key player over the course of the year, representing 18% of the market.

Flow, the blockchain that powers the NBA TopShot and MotoGP NFT platforms, and new arrival Immutable X, which is behind Gods Unchained, Guild of Guardians and TikTok NFTs, represented 6% of the overall volume, which may increase during 2022.

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