The market for NFTs surged to new highs in the second quarter, with $2.5 billion (roughly Rs. 18,560 crores) in sales so far this year, up from just $13.7 million (roughly Rs. 101.7 crores) in the first half of 2020, marketplace data showed.
An NFT is a cryptocurrency asset, representing an intangible digital item such as an image, video, or in-game item. Owners of NFTs are recorded on blockchain, allowing an NFT to be traded as a stand-in for the digital asset it represents.
Sales volumes have remained high after NFTs exploded in popularity early this year. Monthly sales volumes on OpenSea, a major NFT marketplace, reached a record high in June.
Some NFT enthusiasts see them as collectibles with intrinsic value because of their cultural significance, while others treat them as an investment, speculating on rising prices.
Buyers have mostly totalled 10,000 to 20,000 per week since March, outnumbering sellers, according to NonFungible.com, which aggregates NFT transactions on the Ethereum blockchain. Ethereum price in India stood at Rs. 1.7 crores as of 11am IST on July 6.
Total sales volume estimates vary depending on which NFT transactions are included.
DappRadar, which tracks sales across multiple blockchains, said volumes hit just under $2.5 billion (roughly Rs. 18,560 crores) for the first half of 2021. But NonFungible.com's figure is $1.3 billion (roughly Rs. 9,660 crores), excluding around $8 billion (roughly Rs. 59,400 crores) of "DeFi" (decentralised finance) NFTs.
Both sites only track sales which occur on the blockchain, also known as "on-chain" transactions. Some of the biggest NFT sales, such as those at auction houses, have part of the transaction take place "off-chain", meaning they must be manually added to the data.
In March, a digital image sold for a record $69.3 million (roughly Rs. 514 crores) at Christie's as an NFT. No NFT sale has come close since. The second most expensive known NFT sale was a CryptoPunk which fetched $11.7 million (roughly Rs. 85 crores) at Sotheby's.
The US National Basketball Association Top Shot marketplace, which allows fans to buy and trade NFTs in the form of video highlights, has seen volumes shrink and buyers drop to 246,000 in June from 403,000 in March. The average price of a Top Shot "moment" slumped to $27 (roughly Rs. 2000) in June, after peaking at $182 (roughly Rs. 13,520) in February.
But as some NFT types become less popular, others take off.
The Bored Ape Yacht Club, a set of 10,000 unique digital ape NFTs, has become a hit among collectors. The average ape sold on OpenSea as of July 1 for $3,600 (roughly Rs. 2.67 lakhs), up 1,574 percent from the launch price of $215 (roughly Rs. 15,790) in April. Total sales have jumped to $61 million (roughly Rs. 450 crores), according to the club's creators, US-based Yuga Labs.
© Thomson Reuters 2021
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