By Elizabeth Howcroft
LONDON, Jan 10 (Reuters) - From cartoon apes to video clips,
sales of NFTs reached some $25 billion in 2021 as the
speculative crypto asset exploded in popularity, data from
market tracker DappRadar shows, although there were signs of
growth slowing towards the end of the year.
Prices of some non-fungible tokens, crypto assets
representing a digital item such as an image, video, or even
land in virtual worlds, rose so fast last year that speculators
sometimes 'flipped' them for a profit within days.
The art world has been quick to cash in, with auction houses
selling NFTs representing simple cartoons for millions of
dollars with no physical objects changing hands. One NFT artwork
fetched a record $69.3 million at a Christie's sale in March.
Meanwhile, some of the world's top brands, including Coca
Cola and Gucci, have also sold NFTs.
NFT sales volume totalled $24.9 billion in 2021, compared to
just $94.9 million the year before, DappRadar, said on Monday.
DappRadar collects data across ten different blockchains, which
are used to record who owns the NFT.
Estimates of volumes vary by different data provider,
depending on what is included. Transactions which take place
'off-chain', such as major NFT art sales at auction houses, are
often not captured by the data.
CryptoSlam, which also tracks multiple blockchains, said the
2021 total was $18.3 billion. NonFungible.com, which tracks the
ethereum blockchain only, put 2021 sales at $15.7 billion.
This means the money spent on NFTs in 2021 is roughly
equivalent to the amount pledged at COP26 to help countries
phase out coal, or the funding made available by the World Bank
to buy and deploy COVID-19 vaccines.
Sales peaked in August, then declined in September, October
and November before picking up again in December, data from the
biggest NFT marketplace, OpenSea, showed.
This does not appear to be correlated with fluctuations in
the price of cryptocurrencies, which are often used to buy NFTs,
as bitcoin and ether rose in the September to November period.
Around 28.6 million wallets traded NFTs in 2021, up from
some 545,000 in 2020, DappRadar said.
While some see NFTs as the future of ownership in the online
world, buying NFTs as a vote of confidence in the development of
"Web3" or the metaverse, others are baffled as to why so much
money is being spent on items which do not physically exist.
Just 10% of traders accounted for 85% of all NFT
transactions, research published in the journal Nature said.
While the most expensive known NFT sale was $69.3 million, a
common price range was $100 to $1,000, NonFungible.com said.
Prices of the most sought-after NFTs were highly volatile.
The average sale price of a CryptoPunk image rose from around
$100,000 in July to nearly $500,000 in November. By December it
had fallen to around $350,000, CryptoSlam data shows.
Collectible NFTs were the most popular category, followed by
art, NonFungible.com said. Some of the most eye-watering NFT
sales have been for land in online metaverse environments.
Virtual real estate investor Republic Realm bought land in
the virtual world The Sandbox for $4.3 million in November.
(Reporting by Elizabeth Howcroft; Editing by Alexander Smith)