[Opinion] NFT market to remain unpredictable in 2022

While 2021 saw crypto transaction break into the mainstream, the market was volatile. There were 23 non-fungible tokens (NFT) that sold for more than $1 million in December 2021, with the Bored Ape Yacht Club family and Crypto Punks accounting for about two thirds of those big-ticket sales.

NFT sales are seen as a vote of confidence in Web 3.0 development.

All-Time High in the City (ATHC) fetched the highest price for a single asset, 1 630 ETH (about $6 million), making SuperRare the most valuable NFT seller. But CryptoPunks had the highest volume of NFT sales as well as contributing the highest number of top-selling assets.

While Web 3.0 hype is still driving growth alongside the market entry of celebrities and brands like LeBron James, Eminem, Nike, and Coca Cola, pending government regulations like what China did are a major threat to the market.

What the sales data reveals, however, is a whale-dominated field. XCOPY’s ATHC was minted in 2018 and sold for $88 in 2019. A 2020 sale netted $1 446 and then it jumped in value to $2.9 million in 2021 before closing the year at over $6 million.

In total 2021 saw $24.9 billion worth of NFT sales, an over 20x year-on-year increase with 80 percent of the sales volumes generated in the second half of the year. Those year-end sales had no effect on the cryptocurrency market, however, with the only serious price surges coming in September and November.

Most NFTs trade for under $1 000 and only 10 percent of traders accounted for 85 percent of the transaction volume. With around 28 million wallets participating in NFT trades in 2021, another sharp increase in activity from 545 000 in 2020.

Read more: 1kx leads $5m funding round for NFTfi expansion

Featured image by Pawel Czerwinski/Unsplash