NFTs: a story of numbers
Anyone who’s spent any time online (really anywhere) Instagram, facebook, Linkedin — you name it — will have heard of an NFT. Those who haven’t are likely not the people buying NFTs, or even remotely interested in their existence. Despite some people’s reluctance to join in the zeitgeist of the 21st century’s newest wave of technology, most of us will be interacting with NFTs on a much more frequent basis in the future. NFTs can and will change how we see ownership — but that’s a topic for later discussion. For now, even in their infancy, NFTs have demonstrated the capability to hold and maintain value at a massive scale.
This is a story of numbers. Brilliant, shocking, incredibly eye-watering numbers.
The total number of sales in NFTs is tracked on a daily basis on NonFungible.com, a website which tracks news, valuations and reviews of crypto projects. Every journalist, blogger or influencer writing a story on NFTs in the past two years has likely pulled the dataset below from the website and gazed at the chart with wide eyes, wondering how these numbers could possibly be correct.
The first big spike in the graph — in May 2021 — was the first time daily NFT sales topped $100M USD. Just 14 months earlier, newspapers were publishing headlines stating “the NFT market grew by 299% in 2020”. At that time, NFT sales volume was hitting a respectable $120K USD per day.
The third, much larger spike in the graph is from late August 2021. Daily sales were skyrocketing, and on August 28, 2021, $267M USD of NFTs were sold in a single day. That’s more than in 2019 combined.
It’s hard to fathom how big the market for NFTs really is by these numbers. Is $2.5B USD of sales in the first half of 2021 really a large amount? What do these numbers even mean for the average user?
Explaining the growth of a product, or market in brute numbers and percentages may work in traditional finance, where economic growth follows a steady pace of development, and the benchmark to comprehend market success is the S&P 500’s steady 7% average growth. But in a market of disruption — in which a technology evolves from one day to the next, as is the case with the NFT sector — this simply doesn’t put growth into perspective. For the average consumer, the 1785% growth of NFTs was just too abstract to even consider. 2.5 Billion USD in sales is just too massive to comprehend.
The numbers that really is comprehensible is 2%. That’s the share of the global art market currently occupied by NFTs, as estimated by Christie’s. Future sales are likely to drive this number higher yet, and continue to create opportunities for the average person — you or I — to enter a historically inaccessible market of art collection. Measuring against an incumbent market may seem nonsensical — after all, by no means does the success of the NFT market need to come at the expense of the traditional art market. What this measure does tell us is that NFTs have the capability of disrupting entire markets in a short period of time. Considering art as a use-case, NFTs have already created a new segment, which may potentially outpace growth of the global art trade this year. We can only imagine what future NFTs hold when mainstream adoption takes off for use cases ranging from identity cards and passports to patient medical records.
As NFTs continue to mature and expand into new use cases, we can expect more wild, incomprehensible numbers, which all indicate one thing: NFTs are a force to be reckoned with, and are here for the long run.