According to the analytical platform DappRadar, in the third quarter of 2021, trading volumes for unique NFT tokens reached $ 10.67 billion . This is almost 704 percent more than in the previous quarter.
The most notable month in terms of growth rates was August, because during this period alone, the amount of transactions with NFT exceeded $ 5.2 billion. In September, the figure dropped slightly to $ 4 billion . However, the new wave of popularity for NFT has two fundamental reasons – belief in technology and social capital.
Recall that NFT tokens allow you to associate a specific real or virtual object with a token in the cryptocurrency network. Since blockchains are immutable and transparent, anyone can be convinced of the uniqueness of the object itself and the fact that a person owns it. We discussed the NFT topic in detail in a separate article . We recommend that you familiarize yourself in order to better understand what is happening in the coin niche.
At the same time, the popularity of NFT is really great. For example, according to analyst firm Messari, secondary sales of NFT tokens have surpassed the $ 10 billion mark. We are talking about transactions directly between representatives of the crypto community directly. Of this amount, Ethereum accounts for more than $ 6 billion.
That is, investors actively interact with this category of tokens. And that’s why.
Why are NFTs soaring in value so quickly?
Investors in NFT believe that their digital collections will only grow in value because of their uniqueness. In addition, many expect the development of infrastructure and the technologies themselves in the field of NFT – an increase in the number of ways to use unique tokens in everyday life.
For example, in addition to digital objects, NFT can be linked to real goods for which originality is very important. These may be well-known clothing brands: it is still very profitable to sell them with a compact “certificate” of authenticity in order to destroy the fake market. NFTs can also be used as digital passports for universal identity identification – both on Internet platforms and in real life.
As noted by CNBC journalists , so far the most popular way to use NFT in addition to digital art can be video games: conventional and based on decentralized applications. Unique tokens open up new ways to monetize game content for developers and in the future may contribute to the flow of new capital to the crypto market, even from gamers.
The second reason why unique tokens are gaining popularity so dramatically is the importance of social status in the community of new millionaires. Now an expensive picture from a digital art collection, the uniqueness of which is confirmed by NFT, speaks of the wealth of its owner. This is something on the level of an expensive Lamborghini sports car or a watch for several hundred thousand dollars.
Here is a quote from an NFT collector under the pseudonym gmoney on this matter.
When someone buys a Rolex in the real world, they don’t spend thousands of dollars just for the functions of the watch itself. A simple $ 5 watch can do the same tasks. All this is done for the sake of “underlining the status.” To tell everyone: “Look, I have a huge fortune, I can afford this expensive watch.”
Apparently, the same situation is happening with NFT now. Especially considering that Twitter is testing the function of using such tokens as avatars. That is, further the avatar will not just be a picture, but a full-fledged NFT, for which a lot of money was paid. We wrote about this in our Telegram channel.
Money can really be big. For example, the average cost of an NFT token from the CryptoPank line is now the equivalent of $ 485 thousand. So, in fact, the owner of such an NFT is really a wealthy person – and this can be shown.
Here is a graph of the average NFT price from this series since the beginning of 2021. On January 1, the figure was 6.7 thousand dollars.
We believe NFTs have become the new symbol of wealth in the digital age. This is a convenient opportunity to show everyone your success in the field of capital accumulation. In fact, the more elements of expensive NFT collections you have, the more successful you are as an investor.
Obviously, NFTs will find new applications, which means that, in general, we can bet on the development of this area. The main thing is to learn to distinguish promising collections from useless copies or something similar.