The money in NFTs these days is way too big to ignore. Even those who usually shy away from anything related to cryptocurrency are intrigued, to say the least. The NFT project “CryptoPunks” has been one major reason why the rest of the world is starting to pay attention.
The collection managed to fetch an overall sales figure of $1 billion, making it the third member of the NFT billionaire club. The other two are the online game “Axie Infinity” and the P2P NFT marketplace “OpenSea.”
The CryptoPunks Ascension
Anyone who had their feet wet in the world of non-fungible tokens is familiar with the CryptoPunks project, as it is one of the first NFTs to come out. Its most recent “big sale” is Cryptopunk #8888, which sold for a whopping $2.87 million. So far, the project has minted around $10,000 unique CryptoPunks, so it isn’t a total surprise for the collection to breach the billion-dollar mark.
Know that the collection earned $200 million in sales in its first year (2017). It only took roughly four years to move from millions to billions. Yes, the world of NFTs and the money behind it is quite odd, but that’s not necessarily a bad thing.
Digital Art Leads The Way
Even though games have been the biggest drivers of NFTs (and cryptocurrency adoption), they’re hardly the only industry to benefit from blockchain technology. This is the case with art, which has seen a rapid upswing in digital works sold for high prices.
In fact, you can go on OpenSea and find dozens of valuable digital art pieces with some fetching even six-figure prices. The CryptoPunks have led the way, but they certainly won’t be alone for long.
The money involved in these other digital art projects might not be as large as Cryptopunk’s $1-3 million+ sales, but it’s still a notable figure on its own accord. The whole world of non-fungible tokens is still in its early stages, and there’s a lot more to explore.
In the list of the ten most expensive NFTs to be sold, Beeple’s “Everydays: the First 5000 Days” is on top with a $69 million price tag. Interestingly, CryptoPunks occupies four slots in the same list:
- CryptoPunk #3100 – $7.58 Million
- CryptoPunk #7804 – $7.57 Million
- CryptoPunk #6965 – $1.54 Million
- CryptoPunk #4156 – $1.25 Million
Where’s the Money Coming From?
The value of NFTs goes up in billions as a whole, but where’s the money coming from? The answer to that question isn’t as easy to uncover, though it does reveal an interesting tale.
The NFT trading platform OpenSea has pretty much become the face of NFTs and their value in the past year. The service saw around $1 billion pass through its doors in 2018, and it has reached over $3 billion this year.
People are buying all kinds of stuff, from rare digital items to collectibles. CryptoPunks takes the cake as the most saleable collection, but OpenSea also boasts significant sales from Pudgy Penguins and Bored Ape Yacht Club. The marketplace is responsible for facilitating $2.49 billion of NFT transactions as of August 2021.
The Vietnamese-made online game called Axie Infinity is another heavy-hitter in NFT sales this year. It’s an understatement to say that the game has been a major driver of NFT transactions and sales.
This play-to-earn cryptocurrency game allows players to earn tokens while playing. The tokens can be traded in decentralized exchanges for cash. The system became an instant hit, with revenues skyrocketing. In July 2021 alone, the game collected over $90 million in revenue.
But the real fun is when players get to battle each other, develop their “Axies,” and then sell them for profit. This is where the real value comes in.
The Rich Convert Their Cash Into NFTs
One of the most interesting phenomena right now is how rich people from all over the world are converting their fiat cash into digital assets. There’s much more to NFTs than just cryptocurrencies and games, as many wealthy individuals are keen on buying unique NFTs.
So, one of the reasons why there’s been a frenzy of money pouring in is that NFTs are one of the few so-called “safe investments.” For instance, what would you choose if you were to invest your money right now and your choices are NFTs and real estate? That’s a no-brainer right there.
Of course, there’s also some speculation involved with collectors buying art – and NFTs – hoping that they will gain value over time. This doesn’t always happen, but it’s easier to find a buyer for such assets than just about anything else.
The NFT industry is still very new, but there are many indicators that it could evolve into something big. Money is coming in like crazy right now, which is why even celebrities and media personalities are taking advantage.
While Cryptopunks, Nifty Gateway, and OpenSea are often the reference point in the overall NFT market, there’s still a lot to explore and discover. There will be several peaks along the way, but it’s unlikely that this industry will crash anytime soon.
Remember that cryptocurrencies and blockchain technology were once ridiculed as well – but now they’re taking over the world.
NFT is no Bitcoin
Both are in some way linked to cryptocurrency and blockchain technology. But the similarities end there. NFTs may not need anything else but the collectible value in the future. It’s a new breed of exchange that has taken off like a rocket for one simple reason: it’s a new market.
NFTs also have the added benefit of being an open-source technology and a decentralized industry. It helps that the industry is being developed by some of the best artists and game developers out there, though one has to give credit to this new generation of entrepreneurs for doing something daring and setting up these exchange communities from scratch. At the end of the day, it’s a starting point for more freedom than most cryptocurrencies out there.
This is all pretty exciting, and it will be interesting to see how things evolve. NFTs are already a hit, and there’s some serious momentum right now. It’s for everyone to see whether this momentum can be maintained and sustained over time.