NFT Volume Smashes Through $17 Billion Mark, Report Says

Sales of non-fungible tokens (NFTs) rose 21,000% last year to hit $17.6bn, according to Nonfungible.com.

The research, co-authored by BNP Paribas-owned firm L’Atelier, shows trading surged from 2020’s total of $82m.

The data shows that more than 2.5m crypto wallets held or traded digital tokens. And the number of people buying NFTs spiked from 75,000 to 2.3m in one year.

“We’ve seen exponential growth over the past year,” the co-founder of Nonfungible.com, Gauthier Zuppinger, told CNBC.

Buyer beware of scams

Scams, however, have also been rising in different areas of the ecosystem. From pump-and-dumps to plagiarism to phishing attacks, NFT fraudsters have been using more diverse techniques. 

However, according to blockchain analysis firm Chainalysis, NFT transaction volume exceeded $40bn – is much higher than Nonfungible.com’s data.

The report called “Crime and NFTs” showed a rise in wash trades and money laundering through NFT trading.

“Using blockchain analysis, we identified 262 users who have sold an NFT to a self-financed address more than 25 times,” the report says.

“While we can’t be 100% sure that all instances of NFT sales to self-financed wallets are intended for wash trading, the 25-transaction threshold gives us a higher degree of confidence that these users are habitual wash traders.”

Wash trading occurs when a trader buys and sells assets between accounts they control to give the impression of higher sales volumes or that the asset’s value is increasing, among other reasons.

Can NFTs continue to run this year?

Nonfungible.com’s co-founder does not believe that NFTs will conquer the markets this year.

According to Zuppinger, there are “fewer people, fewer buyers, and fewer sales” than last year.

“The global community may have decreased because of speculation and a loss of interest in collectibles. But the global market is still really high and the value of some of these assets has continued to increase,” he added.