Non-fungible tokens (NFTs) continue to be the focus of the cryptocurrency industry, recording a significant trading volume alongside traders. NFTs are digital assets that represent a range of unique tangible and intangible items like collectible sports cards. They exist primarily on the Ethereum system with a unique and verifiable on-chain identity.
Data researched by Trading Platforms UK indicates that non-fungible tokens (NFT) trading volume over the last 30 days on the five most popular NFT marketplaces (NBA TopShot, OpenSea, CryptoPunks, Rarible, SuperRare.co and Axie Marketplace) has hit $419.92 million. The highest daily trading volume was on February 22, 2021, at $64.20 million.
Over the same period, the NFT marketplace recorded an average of 17,766 daily traders. The highest daily number of traders was also on February 22, 2021, at 44,100. If the current interest in NFTs is sustainable, the trading volume and active traders on the marketplaces could potentially keep rising.
Factors driving NFTs growth
The trading volume over the last month highlights the recent surge in NFT interest that has correlated with the entire cryptocurrency market. However, the rise in the NFT marketplace trading volume is mainly driven by factors inherent to their distinct qualities.
Each NFT is distinguishable, making it to be easily verifiable while making fake circulation almost impossible. Basically, every NFT can be traced back to its original issuer while it is indivisible and indestructible. These unique features make NFT lucrative in the field of artwork and collectibles.
Additionally, the entry of big brands and personalities into the NFT field fuels the increased activity in the marketplace. For example, the NFT technology is being used to create tokenized versions of top athletes and celebrities for fans to collect. Therefore, more people enter the space because NFTs are valued for their cultural significance and social capital that comes with holding such notable works.
Generally, the entry of brands into the sector will likely spur growth. Like other investments, NFTs also offer profits for brands, potentially attracting more players into space. A combination of high returns and a sense of association among buyers and issuers fuel the surge into the sector.
Furthermore, NFTs’ popularity is due to the variety of assets they represent, from virtual collectibles, game items, digital artwork, event tickets, real estate, identity documents, certifications, among others. These assets are touching people’s daily lives, and the opportunity to make a profit is contributing to the growth.
At the same, NFTs are also presenting an opportunity for the adoption of cryptocurrencies. Notably, the focus for mainstream crypto adoption has been centered around Bitcoin and other cryptocurrencies. However, NFTs tokens offer an alternative as they can capture individuals’ attention and onboard them into the blockchain space.
NFTs leveraging on DeFi explosion
The explosion of NFTs also comes at a time the cryptocurrency sector is witnessing a surge in DeFi projects. The design pattern of DeFi projects is perfectly blending into the NFT marketplaces. Some projects are leveraging the renewed interest in DeFi to create NFTs and promote them into their networks. Users are attracted to the platforms since incentives and rewards are selling their NTFS.
Overall, the NFT ecosystem will possibly continue to grow as the industry becomes more robust. Investors are beginning to realize that NFTs can represent most things in the virtual world alongside being tied to the real world.