NFT Market is ‘Far From Over’ as Sales Hit 12-Month High

It’s hard to log on to social media today without seeing news about the latest non-fungible token (NFT) being auctioned or sold for hundreds to thousands of dollars. 

New NFTs are being released and sold in the crypto world every day and the excitement has caused some NFTs to spike in value and while the market is still fairly young, the trend of buying these digital collector items are far from over, Unstoppable Domains Founder and CEO Matthew Gould said in an interview with Blockworks.  

NFTs began in 2017 and boomed in popularity after the crypto industry began gaining serious traction and as CryptoKitties, the Ethereum blockchain-based cartoon cats by Dapper Labs, came into the market as collectible items. Soon after the hype dissipated, the market fell in less than a month from the all-time high of 303,620 NFT sales in mid-December 2017 to an average of about 20,000 sales in January 2018. 

“NFTs gained initial mainstream hype with digital collectibles, but as the ecosystem matures, we’re seeing NFTs expand to new use cases,” Gould said. 

Market rebound

While the market has seen volatility throughout the past few months and years, it is facing healthy corrections and already showing a rebound from recent dips, Gould said.

“I have no doubt that NFTs will continue to bounce back, but I hope that it’s steady, sustainable growth, and that NFT marketplaces put protections in place to help people invest responsibly,” Gould added. 

NFT sales are still down about 81% from the all-time high in 2017, but are at the highest number of sales in the past 12 month period. In just one week, NFT sales spiked 101.8% from 29,256 sales to 59,048 as of August 5. Additionally, sales are up 312% from the year-ago date, according to data from NonFungible. 

“As NFT marketplaces evolve and become more user-friendly, customer retention and volume will improve. People will find it easier to buy, sell, and trade NFTs, and they’ll keep coming back,” Gould said. Additionally, as the market expands beyond the Ethereum blockchain into new verticals, market activity will also become less correlated to cryptocurrency markets like bitcoin and ethereum, he said. 

Some crypto enthusiasts, gamers, musicians, celebrities and more are dipping their toes into the NFT market, but there’s still a long way to go until it reaches widespread adoption as more people need to be educated about the industry, Gould said. 

Earlier this year, Twitter founder and CEO Jack Dorsey auctioned his first tweet from 2006 as an NFT with a hefty final bid of $2.9 million, which gave the buyer ownership of the digital collector item. Separately, in June crypto exchange company Binance launched a NFT marketplace with an auction featuring works of Andy Warhol and Salvador Dali and its competitor, FTX also launched a NFT marketplace earlier that month. 

Into the metaverse

“We’re definitely seeing traction that speaks to people’s interest beyond things like art and gaming. People are also purchasing NFTs that act as a “membership” to metaverses, as we’re seeing with projects like Bored Ape Yacht Club. In the next few years, NFTs that provide access to payments, Web 3.0, and the metaverse will continue to gain adoption,” Gould said. 

Unstoppable Domains is also seeing the NFT market expand beyond its current space, Gould said. There’s a growing interest in NFT domain names and the company has recently sold more than 1 million blockchain usernames which are minted as NFTs on the Ethereum blockchain to give users full ownership and control over the names, Blockworks previously reported. 

The personalized usernames allow people to complete crypto transactions across wallets and exchanges, similar to how people want their own preferred usernames on Twitter, Instagram or Venmo, users are now claiming their blockchain domain name through their company’s platform, Gould said. 

People are beginning to think of NFTs “not only as collectibles, but as a major part of the future of digital ownership and identity, it’s easy to see how long-term growth is inevitable,” Gould said.