Trading in NFTs spiked 21,000% to more than $17 billion in 2021, report says

cnbc.com:

Sales of nonfungible tokens jumped to more than $17 billion in 2021, according to a new report from NFT data company Nonfungible.com.

The study, developed with BNP Paribas-owned research firm L'Atelier, said trading in NFTs hit $17.6 billion last year, reflecting an eye-watering 21,000% surge from 2020's total of $82 million.

NFTs are tradable assets that keep track of who owns a certain digital item — say, a work of art, or video game avatar — on the blockchain. They entered mainstream consciousness in a big way last year.

A token representing a collage by the digital artist Beeple sold for a record $69 million at a Christie's auction, while popular collections like the Bored Ape Yacht Club have lured celebrity buyers from Jimmy Fallon to Snoop Dogg.

«We've seen exponential growth over the past year,» Gauthier Zuppinger, co-founder of Nonfungible.com, told CNBC.

Nonfungible.com's number for total NFT transactions in 2021 is lower than some other estimates. An earlier projection from blockchain analysis firm Chainalysis put the figure at more than $40 billion.

Zuppinger says this is down to the company's own methodology for measuring legitimate volumes of NFT trades. The Nonfungible.com data rules out transactions involving bots and wash trading, a practice where investors simultaneously buy and sell an asset to artificially inflate market activity.

While proponents believe NFTs to be a valuable way of proving ownership of digital content, critics say the market has attracted predatory behavior. Participants are often encouraged to speculate on prices, and there's evidence emerging of their growing use for money laundering and other nefarious activities.

More than 2.5 million crypto wallets belonged to people holding or