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NFT sales surge to US$10.7 billion in Q3 as crypto asset frenzy hits new highs

NFT sales surge to US$10.7 billion in Q3 as crypto asset frenzy hits new highs

Visitors are pictured in front of an immersive art installation titled "Machine Hallucinations - Space: Metaverse" by media artist Refik Anadol, which will be converted into NFT and auctioned online at Sotheby's, at the Digital Art Fair, in Hong Kong, China, on Sep 30, 2021. (Photo: REUTERS/Tyrone Siu)

LONDON: Sales volumes of non-fungible tokens (NFTs) surged to US$10.7 billion 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 US$1.3 billion in Q2 and US$1.2 billion in Q1, DappRadar said.

On the biggest NFT marketplace, OpenSea, sales volumes hit US$3.4 billion 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 US$13.2 billion. Another market tracker, CryptoSlam, which excludes "off-chain" sales, says the figure is US$9.6 billion.

Meanwhile, NonFungible.com, which tracks NFTs on the ethereum blockchain only, puts the 2021 total volume at US$7 billion.

The most expensive known NFT sale was a digital collage sold at Christie's for US$69.3 million 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 US$101-US$1,000, while those in the US$1,001-US$10,000 bracket accounted for 20 per cent of sales, and 17 per cent fetched less than US$100, 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 (around US$6.9 million at the time). Average Art Blocks prices have risen to roughly US$15,100 per NFT in September, up from US$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 US$776 million in Q3 revenues, DappRadar said.

Source: Reuters

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