Quick Take:
- NFT sales rocketed to $25 billion in 2021.
- Several reports had predicted sales in the range of $17.7 billion – Cointelegraph Research and $22 billion – DappRadar.
- Another report published by Bloomberg last week estimates NFT sales surpassed $40 billion last year.
The non-fungible token (NFT) industry is still in its nascent stages after coming to life last year. NFTs were merely a topic of interest before Covid-19. However, the pandemic appears to have triggered an influx of celebrities into the space, massively boosting popularity and adoption.
Since then, the market has grown from about $95 million in sales in 2020, to a whopping $25 billion industry, according to a report compiled by Reuters. Even more encouraging for NFT collectors is that research experts underestimated how quickly the market was growing with their projections for cumulative NFT sales.
In one of our previous reports, we cited Cointelegraph Research’s estimate of $17.7 billion, while DappRadar had forecasted a figure of about $23 billion.
Cryptoslam, which tracks multiple blockchains had estimated sales in the region of $18.3 billion, whereas Nonfungible.com, which tracks Ethereum wallets only had a figure of $15.7 billion.
Notably, some of these reports were published as late as December, which demonstrates the magnitude of the surprise.
Yet, even Reuters’ comprehensive report could be massively underestimating the actual figures, according to another report cited by Bloomberg.
The global media and research conglomerate points to a report by Chainalysis, a blockchain industry insights and analytics firm, which estimates cumulative NFT sales through 2021 at about $41 billion.
The Reuters report, however, is more detailed with data also showing that approximately 28.6 million wallets traded NFTs in 2021, rising from about 545,000 in 2020. It also shows that NFT sales are extremely skewed with just 10% of the wallets accounting for 85% of the transactions.
The report also alludes to suggest that NFT sales benefited from a few expensive sales, highlighted by the most expensive NFT artwork, which sold at a Christie’s sale in March for $69.3 million. In general, the average trading price for NFTs ranged from $100-$1,000.
The rapid increase in sales was driven by the explosive adoption of the metaverse and the growing interest in collectibles. Several companies are investing in NFTs and the metaverse in anticipation of the intersection of the two markets.
However, the report also cautions last year’s explosive growth may not be replicated this year. Reuters drew data from the largest NFT marketplace, OpenSea which showed that NFT sales declined in September, October and November after peaking in August, before spiking again in December.
The fact that NFTs continued to experience rising sales when the overall crypto market was declining may point to a potential slowdown in 2022.
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