Cryptocurrency price gains during the COVID-19 pandemic are often cited as a driver behind the NFT market's growth.
An immersive art installation titled "Machine Hallucinations — Space: Metaverse" by artist Refik Anadol
NFT sales volume surged to $10.7 billion (roughly Rs. 79,820 crores) in the third quarter of 2021, up more than eightfold from the previous quarter, according to data from market tracker DappRadar, as the frenzy for crypto assets reached new highs.
NFTs use blockchain to record the ownership of digital items such as images, videos, collectibles, and even land in virtual worlds.
Surging sales and hefty prices on NFTs - items which do not physically exist - have baffled many but the explosive growth shows no sign of abating.
The third-quarter figure was up from $1.3 billion (roughly Rs. 9.680 crores) in Q2 and $1.2 billion (roughly Rs. 8,935 crores) in Q1, DappRadar said.
On the biggest NFT marketplace, OpenSea, sales volumes hit $3.4 billion (roughly Rs. 25,320 crores) in August. Activity remained strong even in September when global stock markets faltered.
Cryptocurrency price gains during the COVID-19 pandemic are often cited as a driver behind the NFT market's growth - because people use cryptocurrencies to buy NFTs - but enthusiasts say that the crypto assets have value independently of market conditions.
To be sure, estimates for the size of the NFT market vary depending on what is included. Transactions which take place "off-chain", such as NFT art sales at auction houses, are often not captured by the data.
DappRadar's numbers, which include multiple blockchains and "off-chain" transactions, put total 2021 sales volume at $13.2 billion ((roughly Rs. 98,285 crores). Another market tracker, CryptoSlam, which excludes "off-chain" sales, says the figure is $9.6 billion (roughly Rs. 71,480 crores).
Meanwhile, NonFungible.com, which tracks NFTs on the Ethereum blockchain only, puts the 2021 total volume at $7 billion (roughly Rs. 52,110 crores). Ether price in India stood at Rs. 2.6 lakhs as of 1:30pm IST on October 5.
The most expensive known NFT sale was a digital collage sold at Christie's for $69.3 million (roughly Rs. 515 crores) in March. Since then, no known NFT has come close to this price, but auction houses still hold NFT sales, often fetching millions.
However, despite growing sales and celebrities and other investors jumping on the trend, the number of NFT buyers remains relatively small: there were just 265,927 active wallets trading NFTs on the ethereum blockchain in Q3, NonFungible.com said.
More than half of NFTs sold in Q3 were $101 (roughly Rs. 7,510) -$1,000 (roughly Rs. 74,440 crores), while those in the $1,001 (roughly Rs. 74,510) -$10,000 (roughly Rs. 7.4 lakhs) bracket accounted for 20 percent of sales, and 17 percent fetched less than $100 (roughly Rs. 7,440), NonFungible.com said.
One NFT brand to see particularly high growth in Q3 was Art Blocks, a US-based project which sells NFTs of algorithmically-generated digital artworks.
On Saturday, an Art Blocks NFT sold for 2,100 Ether (roughly Rs. 51 crores at the time). Average Art Blocks prices have risen to roughly $15,100 per NFT in September, up from $3,300 in July, according to CryptoSlam.
Gaming-related NFTs also surged, with the blockchain-based game Axie Infinity leading the "play-to-earn" sector with $776 million (roughly Rs. 5,780 crores) in Q3 revenues, DappRadar said.
© Thomson Reuters 2021
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