Ethereum NFT Market primed for explosive growth in 2021

Short about

  • NFT transactions tripled last year, according to a new report from NonFungible and L’Atelier.
  • The total value of the NFT market is now $ 250 million.
  • Virtual worlds are the most popular segment with 25% of the market, but art is catching up fast and sales grew by 2,800% in 2020.

New report on the exploding market for non-fungible tokens (NFTs) reveals that transactions will triple by 2020 and reach more than $ 250 million Total.

Known as NFTs, these unique digital assets are found on Ethereum blockchain, can be anything from the BBC brand Dr Who trades short and Ubisoft Raving Rabbids tokens for luxury works of art. The biggest sale to date is a set of grounds of virtual land that went after $ 1.5 million on blockchain game Axie Infinity last week.

The market experienced astonishing growth last year, with utility cases growing, buyers surpassing sellers and plenty of retailers earning six-figure profits, according to the report released today by the leading NFT research firm. NonFungible.com and foresight business, L’Atelier.

“2020 has been a historic year for NFTs and we have seen healthy growth across many metrics,” said Dan Kelly, CEO of NonFungible Decrypt. “Equally exciting is the explosion of various utility cases, communities and projects that have evolved over the last year,” he added.

A historic year for NFTs

The report is based on NFT on-chain transactions on the Ethereum blockchain using ERC-721 token standard, which is common among NFTs.

According to data, the total value of all NFT transactions (which includes sales and all other transactions, such as “breeding” Cryptokitties, “embossing” tokens and renting virtual spaces) increased from over $ 62 million in 2019 to over $ 250 million in 2020.

In 2020, NFT art sales alone grew by 2,800% per year. Report, and major brands like Turner Sports and watchmaker Breitling has jumped on board, making the asset class firmly mainstream.

Crypto collectibles are digital assets for gamers. Image: Uplash

“Traditional brands such as Nike, Louis Vuitton and Formula 1 are already leading the first generation of commercial applications for NFTs,” said Nadya Ivanova, Chief Operating Officer at L’Atelier. Decrypt. “We expect to see more brands come in and invest more resources in this space as they find new ways to engage virtually and profitably with their customers through NFTs,” she added.

The Atelier, which is part of the French international banking group BNP Paribas, gave a taste of the things that were to come in May last year – as it showed how people earned six-figure salaries in “Virtual Economy” of gaming platforms like Fortnite and virtual worlds like e.g. Decentraland.

NFTs: An important driving force for economic activity in virtual worlds

The new report finds that NFTs are “primed to become a leading new asset class for the virtual economy in the coming years, both in terms of their economic value and their practical applications, and an important driver of economic activity in virtual worlds. “

According to the report, the total number of active wallets trading in NFTs increased by 97% between 2019 and 2020 (from 112,731 to 222,179). On top of this, the accelerating growth of NFTs throughout 2020 suggests a strong upward trend in 2021, according to the report.

Focusing solely on NFT sales, virtual worlds that house numerous virtual assets as well as land make up the largest sector in the market with 25% of total sales.

But virtual art was the most effective segment in terms of growth and accounted for 24% of the market. Sales increased from $ 456,885 in 2019 to $ 12.9 million in 2020.

Gaming involving NFTs accounted for 23% of the market in 2020, delivering the largest number of sales (to 629,553). Collectibles related to sports, such as the F1 or NBA, were another growing sector, accounting for 13% of total sales.

Taking advantage of the NFT opportunity

The report attributes the growth in the NFT market partly to increased online activity after the pandemic, but adds that it also reflects a broader, accelerating trend towards spending more time and money on virtual goods, services and experiences.

And major financial players are moving quickly into this trend, “taking advantage of the opportunity to leverage a broader shift to virtual finance that is already evident in the rise in cryptocurrencies and decentralized finance,” according to Ivanova.

This, she said, already leads to a dedicated financial infrastructure and services and NFT-backed financial products such as insurance and secured loans.

Kelly predicted that future activity will scale as new layers are built on Ethereum, and will expand further to the new generation of high-throughput blockchains in the coming years.

NFT boom time has only just begun.

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