The momentum behind cryptocurrency-based digital collectibles continues to build as the NFT market posts its best month yet—with tradeable “moments” platform NBA Top Shot leading the way.
NFTs, or non-fungible tokens, are digital works (mostly art, trading cards or in-game items) that exist primarily on the Ethereum network and have a unique and verifiable on-chain identity. And the market for such items is exploding.
The top three NFT marketplaces saw a combined trading volume of $342 million in February as interest in digital collectables continues to rise among everyday users and high profile celebrities, according to Dapp Radar’s February 2021 Industry Report. For context, NFTs saw just $12 million in volume December 2020 and just over $200 million for the entire year, according to industry data firm NonFungible.
What are NFTs and who is selling them?
Unlike most other digital assets—such as Bitcoin or Ethereum tokens, which are functionally the same and can be freely interchanged—NFTs cannot be duplicated or split among various holders. Like a piece of unique art, NFTs are valued for their cultural significance and social capital that holding notable pieces implies. NFTs are also popular among artists because a portion of any resale price is given directly back to the original creator.
And there’s been no shortage of notable NFT issuances in recent months.
Musician, and girlfriend to Tesla founder Elon Musk, Grimes recently sold a collection of NFTs for $6 million, and musician 3LAU sold an album of 33 NFTs for $11 million. Digital artist Beeple made over $3 million in a single weekend through the sale of an NFT collection, and Lindsey Lohan and Post Malone have also gotten in on the action, selling some pieces for as much as $50,000.
NBA TopShot, offering basketball-themed collectibles officially licensed by the NBA, is the reigning champion among NFT marketplaces to date. According to Dapp Radar, NBA Top Shot captured more than 65% of the total NFT market volume in February, worth more than $225 million.
The limited-edition Cryptopunks market saw volume of $79 million over the same period, and Hashmasks volume rose to $33 million. The largest single NFT sale to date topped $6.6 million for the ‘Crossroads’ piece on the Nifty Gateway secondary market. Not to be left behind, the NFT-base crypto game Axie Infinity also saw record breaking sales in February, with nine plots of in-game land being sold for more than $1.5 million.
At this rate, it may not be long before $300 million in monthly volume for NFTs seems like a small figure.
