Why The NFT Art Market Saw $941 Million In Trading Volume In ... - Morningstar

Why The NFT Art Market Saw $941 Million In Trading Volume In … – Morningstar

By Anushree Dave

Non-fungible tokens are making a comeback, according to DappRadar, which tracks and analyzes decentralized applications

Non-fungible tokens registered $941 million in trading volume in January 2023, up 38% from December, and the highest on record since June 2022, according to a Feb. 2 report by DappRadar, which tracks and analyzes the activity of NFT marketplaces.

Non-fungible tokens, which provide proof of ownership of a digital asset like online artwork, surged in popularity in 2021 with the sale of a $69 million digital art piece by Beeple. Two large NFT art collections, including CryptoPunks and the Bored Ape Yacht Club, also saw a rise in popularity shortly after.

“One reason for the surge in the NFT market in January is due to the success of Yuga Labs’ NFT collections, which accounted for 34.3% of the total NFT trading volume with a trading volume of $324.8 million,” said Sara Gherghelas, blockchain analyst at DappRader, in an email to MarketWatch.

Yuga Labs are the creators of the Bored Ape Yacht Club, a 10,000 piece collection featuring cartoon apes once valued at $1 billion. Its holders include Justin Bieber, Jimmy Fallon, Serena Williams, and other big name celebrities.

In January, Yuga Labs launched a product called the Sewer Pass access pass, which grants holders access to an exclusive online game. Gherghelas said the release of the Sewer Pass collection also generated “a lot of excitement in the NFT world,” and explains why trading volume was up.

An additional factor that contributed to the high NFT trading volume in January was the anticipation of a popular token launch set for Feb. 14, created by Blur, an NFT marketplace. The token “motivated users to be more involved in NFT trading, to have higher returns,” said Gherghelas.

The Blur marketplace has become one of the fastest-growing NFT marketplaces, and saw a tradi