Market for NFTs Levels Off After Hectic First Quarter

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In Brief
  • NFT Levels out after frantic Q1.

  • Grew in popularity during lockdown.

  • Continuing to grow with mainstream acceptance.

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Non-fungible tokens (NFTs) took over news stories at the beginning of 2021 and they seem to have finally levelled off after a frantic first quarter. The market for digital-assets based on blockchain slowed in April, according to platform and product data. 

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NFT’s took off in popularity over the past year and this was reflected in the hectic nature of the NFT market during the first part of 2021. NFTs are unique digital tokens that can’t be replaced by anything else, where one cryptocurrency can be traded for another, NFTs cannot. They use the smart contract function offered to store extra information. 

The rising popularity of NFTs over the past year is being linked to people spending more time at home during lockdown and as a result being online. Furthermore, with cryptocurrencies continuously breaking price records there are more and more crypto-rich speculators out there. 

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Trading volumes

The swift rise of the NFT market over the past year has resulted in growing mainstream acceptance. In March, Christie’s auction house oversaw the first ever sale of an NFT by a major auction house. The sale of Mike Winkelmann’s, aka the digital artist Beeple, brought in a whopping $69 million. This was the beginning of NFTs acceptance by major auction houses, with Sotheby’s following suit.

On one of the major NFT marketplaces, OpenSea, monthly sales were $93.6 million in April. This was down from $150 million in March and slightly less than the $95 million recorded in February. However, OpenSea recorded sales of about $1 million a month.

While trading volumes are below the March peak, they are still considerably higher than last year. This was reflected on other platforms such as the Gemini owned Nifty Gateway. They saw monthly sales drop from $144 million in March to $60.9 million last month. This platform is owned by renowned virtual currency entrepreneurs Cameron and Tyler Winklevoss, who are considering taking it public.

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Adam is working in London while studying for a self-paced MicroMasters in Data, Economics and Public Development online with MITx. Before this he studied at Trinity College Dublin where he first became interested in cryptocurrency and blockchain. First writing for a university publication on cryptocurrency in 2015, Adam has been writing about and following the crypto economy ever since.

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