The price of Bitcoin is down but, contrary to conventional wisdom, the market for NFTs has not faded. The NFT phenomenon dominated the first quarter of 2021, culminating on March 11th with Beeple’s record price of $69 million at Christie’s. A month later, in mid-April, the price of Bitcoin reached its apex around $63,500. Since then Bitcoin’s dollar price has dropped by more than half. Nevertheless, NFT sales have not just remained on par with the pace of the first quarter of 2021, according to a Dapp Industry Report, but exceeded them in the second quarter.
DappRadar, which tracks blockchain sales, saw that in the second quarter of 2021 NFTs brought in $2.4 billion, slightly above the first quarter’s $2.3 billion. These numbers don’t even account for off-chain sales, transfers that take place through auction houses, as with the Beeple sale. The same report found that sales spiked 111.46% compared to Q1, with the number of active wallets also jumping 151.89% in the same time period.
Meanwhile, the NFT marketplace OpenSea is now valued at $1.5 billion, after Silicon Valley venture capital firm Andreessen Horowitz led another round of funding for the company, raising $100 million. This past June alone OpenSea saw $160 million worth of sales.
What’s keeping NFTs afloat? It’s not necessarily art. NFTs are now finding a fast growing utility as “keys” for unique access to experiences and also in gameplay, something experts long predicted would be the ultimate value of non-fungible tokens. Bored Ape Yacht Club uses NFTs as a membership card for their digital “Yacht Club” which mainly consists of access to a Discord server, Telegram chat group, and a digital graffiti wall called “THE BATHROOM.” Bored Ape has had $70 million in sales since its launch in May.
NFTs for gameplay are also doing quite well. For example, Axie Infinity, a play-to-earn game where players breed and sell Pokemon-like “axies” collected $30 million in fees just this past week, which is more than Ethereum, Bitcoin and every other top ranked DeFi app collected in the same time period.
This isn’t to say that more traditional collectibles aren’t doing well. CryptoPunks, a collection of 10,000 unique “Punks” represented by pixelated faces, remain strong. Two Punks, 5002 (2017) and 5690 (2017), sold this past week for $385,000 and $354,000 respectively. Some of the rarest Punks sold in May in the millions, peaking at around $7.5 million on OpenSea. But off chain, NFT sales are stronger. CryptoPunk 7523 (2017) sold for $11.7 million at Christie’s in June. Does that suggest auction houses and galleries might have better luck selling art NFTs than NFT marketplaces? The art world certainly hopes so.