Driven by online games, art and sport, digital tokens have experienced a historic first half. Collectors and speculators are snapping up these certificates of ownership. This market, still small compared to cryptos, is under their influence.
$ 5.4 million. This is the price reached for the source code of the Web, designed in 1990 and 1991 and which paved the way for Internet browsing, during a sale organized by Sotheby’s. The auction had started at $ 1,000 and 51 bids were submitted. Its acquirer, anonymous – perhaps one of the pundits of Silicon Valley – acquired this historic code, authenticated by a non-fungible token (NFT).
This high price is a further testament to the craze for NFTs, digital property certificates on originals which can be video or audio files, gifs, works of art, collector cards… NFT sales exploded in the first half of the year to $ 2.47 billion, from just $ 13.7 million in the same period a year earlier, according to Reuters. Transactions have surfed on the worldwide craze of collectors and speculators for these digital objects. Particularly popular are the original video files of the top baskets of American basketball stars, for example. And their prices are soaring.
Snowden and Paris Hilton
The bestsellers (several million dollars) were of digital characters in the likeness of Edward Snowden, the whistleblower, Paris Hilton, and the must-have CryptoPunks, unique digital figures. The success of the Axie Infinity and Alien Worlds games, whose characters are tradable and authenticated by NFTs, has significantly contributed to the growth of the market. It could “see mass adoption” in the years to come, according to the DappRadar report.
The daily record for NFT sales was reached on May 3 (at $ 100 million). Daily volumes have increased 60-fold since 2018. In May, eBay began authorizing sales of NFTs (music, game cards, etc.) on its site, which has 182 million customers worldwide. However, the group still imposes certain restrictions. But it is the first e-commerce site to have taken the plunge. He wants to gradually gain strength in this niche considered both very promising and profitable.
Media coverage of art
Popular in the art sector and virtual worlds such as CryptoPunks, NFTs are ancestors of marked tokens, unique fractions of bitcoin associated with real assets (properties, collectibles, etc.) that appeared in 2013. “Quantum”, by New York artist Kevin McCoy, an octagon-shaped animation, is the first NFT, created in 2014, and resold this year by Sotheby’s for $ 1.4 million. The NFTs have truly emerged from their anonymity for a little over a year and have experienced significant growth thanks to the worldwide media coverage of sales organized by Christie’s and Sotheby’s.
Volatility
NFTs are bought mainly with ethers but also bitcoins, on dedicated marketplaces, such as OpenSea and Rarible. A rise in the price of these cryptos promotes an increase in sales of NFT, according to a study over the period from January 2018 to April 2021. Holders of ethers and bitcoins have more purchasing power, and sellers of NFT benefit from the increase in selling prices.
Conversely, the NFT market is – for the moment – still too small to have an impact on the price of large cryptos such as ether and bitcoin. It is subject to their volatility (rise or fall in prices) but it does not influence them. Sales had plunged in the wake of the crypto correction from mid-May.
