NFTs had a giant year in 2021. According to a report from nonfungible.com, the NFT Market hit $17.6 Billion dollars in trading volume for 2021, a 21,000% increase from 2020s $82 million.
Although $17.6 billion is a large number, some other reports estimate that the total trading volume is far higher. Chainalysis, a blockchain analysis firm, estimated that the number was over $40 billion.
The co-founder of nonfungible.com, Gauthier Zuppinger, said that the much estimate is number is due to the company’s unique methodology for measuring legitimate trading volume. Nonfungible.com makes an effort to rule out artificial transactions and market activity from investors trying to game the system and push up the value of their assets by simultaneously buying and selling.
In addition to the total value of trading in the NFT market, the total number of crypto wallets either holding or trading in NFTs was more than 2.5 million, also a steep increase from 2020s 89,00.
Though the craze of NFTs was rampant in 2021 the hype seems to be starting to decline. According to google trends, search results for NFTs are falling sharply from their peak in late January, as you can see in the chart below.
We believe that the decline is expected and the market probably needs a cool off after the crazy year. However, given the use cases and potential for the technology of smart contracts and NFTs, we believe that the next big move for this industry will be even larger and more impactful.