According to new research by nonfungible token data provider Nonfungible.com, sales of nonfungible tokens will have increased to more than $17 billion by 2021.
According to the study, which was done with the help of a research firm owned by BNP Paribas called L’Atelier, trade-in NFTs reached $17.6 billion last year, up 21,000 percent from the $82 million figure from the previous year.
A digital asset such as a work of art or a video game avatar is tracked using NFTs, which are tradable assets on the blockchain that keep track of who owns what digital object. Last year, they made a significant impact on the general public’s minds.
NFT that sold for $69 million
Christie’s auction house set a new world record for the sale of an art token symbolizing a collage by the digital artist Beeple when it sold for $69 million. Meanwhile, popular collections such as the Bored Ape Yacht Club have drawn in celebrity purchasers such as Jimmy Fallon and Snoop Dogg.
Nonfungible.com’s estimate of the total number of nonfungible transactions in 2021 is lower than that of certain other sources. According to a previous estimate from blockchain analysis firm Chainalysis, the figure would be in the neighborhood of $40 billion.
Zuppinger explains that this is due to the company’s own approach to determining the legal volume of non-financial trading. This excludes transactions involving bots as well as wash trading, which is a process where investors simultaneously buy and sell an item in an attempt to artificially inflate the amount of activity on the market.
While proponents feel that NFTs are a vital tool for verifying ownership of digital content, detractors claim that the market has become a breeding ground for unscrupulous activity. Participants are frequently encouraged to speculate on pricing, and evidence is accumulating that they are increasingly being used for money laundering and other criminal purposes.