NFTs Shatter Monthly Trading Record With $4 Billion In Sales—Here’s Why They’re Still Booming Despite The Crypto Crash

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Topline

An explosion of fervor around the buzzy blockchain-based digital collectibles known as non-fungible tokens has helped OpenSea, the world’s largest NFT marketplace, top $4 billion in trading volume this month for the first time ever, defying the broader cryptocurrency market’s lackluster performance as celebrities and corporations embrace the hype around NFTs.

An illustration taken in London on December 30, 2021, shows a PsychoKitty NFT (Non-Fungible Token) … [+] created by psychedelic artist Ugonzo.

AFP via Getty Images

Key Facts

Buoyed by as much as $261 million in daily trading volume, NFTs on OpenSea topped $4 billion in trading volume for the month of January after posting $218 million in trades Wednesday, adding to a monthly record that’s up nearly 20% from the previous peak of $3.4 billion in August, according to data from Dune Analytics.

In a note, Nigel Green, the CEO of $12 billion wealth advisory DeVere Group, said the booming NFT activity comes as a growing number of global sports franchises, fashion brands and celebrities rally around the digital collectibles.

Crypto analyst Marcus Sotiriou, of UK broker GlobalBlock, concurred via email, pointing out celebrities such as Britney Spears, Eminem and Jimmy Fallon have all recently been linked to Bored Ape Yacht Club, a collection of 10,000 Ethereum-based NFTs sold on OpenSea at an average price of more than $300,000.

The popular images—depicting cartoon apes in varying states of emotion—have been sold for as much as $1.4 million this month, amassing a combined market value of more than $2.4 billion and trading volume of more than $43 million over the past week (representing about 3% of OpenSea’s total), according to CoinGecko.

Green notes the hype also comes as investors “increasingly perceive” NFTs as a future-proof asset class, largely because of their use of blockchain to show ownership and encode digital rights.

The NFT explosion has defied a broader crypto market drawback, which has pulled bitcoin down 12% this year, while tanking ether and sol—the two most popular cryptocurrencies for NFTs—by 17% and 23%, respectively.

Surprising Fact

NFT trading volume totaled more than $23 billion last year, reflecting a staggering increase of more than 20,000% from less than $100 million in 2020.

Tangent

Earlier this month, rapper Eminem became the latest celebrity staking claim to the bragging rights around BAYC NFTs, scooping up a piece nicknamed “EminApe” for $460,000 and immediately making it his Twitter profile picture.

Key Background

Celebrities haven’t been alone in joining the hype around NFTs. Last month, Nike purchased NFT start-up RTFKT Studios for an undisclosed amount, and luxury carmaker Ferrari signed a multi-year partnership with Swiss tech company Velas Network days later to create NFTs. Meanwhile, a slew of players have been trying to cash in on the mania by building their own NFT marketplaces. Earlier this month GameStop shares skyrocketed as much as 30% after reports the brick-and-mortar videogame-seller has hired more than 20 people to help build an online marketplace to trade NFTs of virtual games. Even retail giant Walmart is exploring the space, with reports this week indicating the firm has filed several NFT-related patent applications, including one for an NFT marketplace.