NFTs market hits $22bn as craze turns digital images into assets
The global market for non-fungible tokens hit $22bn (£16.5bn) this year as the craze for collections such as Bored Ape Yacht Club and Matrix avatars turned digital images into major investment assets.
NFTs have drawn from veteran investors similar warnings to those issued about cryptocurrencies: that they are symptomatic of an unsustainable, digital gold rush. NFTs confer ownership of a unique digital item – whether a piece of virtual art by Damien Hirst or a jacket to be worn in the metaverse – upon someone, even if that item can be easily copied. Ownership is recorded on a digital, decentralized ledger known as a blockchain.
Data from DappRadar, a firm that tracks sales, showed that trading in NFTs reached $22bn in 2021, compared with just $100m in 2020, and that the floor market cap of the top 100 NFTs ever issued – a measure of their collective value – was $16.7bn.
The most valuable NFT sale this year was The First 5000 Days, a digital collage by Beeple, the name used by the American digital artist Mike Winkelmann, that was auctioned for $69.3m in March, making it one of the most valuable pieces of art ever sold by a living artist. Another Beeple NFT, Human One, sold for $29m.
Other multimillion-dollar NFTs included the Bored Ape Yacht Club, a collection of 10,000 NFTs represented as cartoon primates that are used as profile photos on the social media accounts of their owners and which raised $26.2m. Celebrity BAYC owners include the talk show host Jimmy Fallon and the rapper Post Malone.
DappRadar said a key factor in the surge in NFT trading was mainstream businesses entering the fray.
Coca-Cola raised more than $575,000 from selling items such as a customized jacket to be worn in the metaverse world of Decentraland while the Matrix star Keanu Reeves failed to keep a straight face when told by an interviewer that his Matrix film series now had NFTs attached to it.
