- CryptoPunks has generated $45.2 Million in sales volume in the last week of February alone
- NBA Top Shot attracted $147.8 Mllion in sales in the last few days
- Popular musician Grimes has sold a collection of NFTs for nearly $6 Million
- Electronic music producer 3LAU sold a collection of limited edition NFTs for more than $3 Million
Non Fungible Tokens or most commonly known as NFTs have already become the latest trend in the crypto world, and NFT market is growing enormously at an unimaginable speed.
In 2020 alone, market for NFTs surpass $250 Million mark, which is nearly a growth of 300% compared to the year 2019. Creators of NFTs have made millions by trading their collectibles. And the demand for NFTs are expanding further.
Over the past week NFTs have made news by reporting million dollar sales on various collectibles. Now the questions arise as to how can a digital asset such as a NFT be sold for millions of dollars? Are there people who would actually buy a NFT for such an amount? Or is it simply madness?
Why certain NFTs worth millions?
NFTs gain value off based on the principles as of Bitcoin, where there is only a limited number of the tokens and those items cannot be duplicated. Due to this scarcity it make NFTs valuable tokens, and when many try to demand a certain NFT its worth can reach millions.
Here, the basic principles of demand and supply economics can be applied. There will be a very limited supply of NFT tokens (hence these can not be duplicated and if we were to consider art works, technically it will be a supply of 1 NFT of a particular art work) and when those tokens are faced with a huge demand, prices will rise exponentially.
Furthermore, authenticity also plays a major role in the boom of NFTs. The tokens are easily verifiable and can always be traced back to the original creator. As a result, owners of NFT tokens are able to fully possess the individual digital assets with the knowledge that they have the only token of its kind.
The value of NFTs is mainly based on the product’s immutability. As explained earlier NFTs cannot be destroyed, deleted, or duplicated. The token exists solely on its native platform, stored on the blockchain. Therefore, elements from one platform cannot be moved to another.
Price elasticity of NFTs too matter when determining their worth. If a certain NFT faces an inelastic demand, meaning buyers are not being price sensitive and willing to get hold of that NFT despite the price, then there’s a possibility that the NFT might reach million of dollars in value.
What are the NFTs that have been sold for millions?
CryptoPunks which was a collection of NFTs released by developers Larva Labs back in 2017, have regained its popularity lately. It has generated $45.2 Million in sales volume in the last week of February alone according to the website NonFungible.com, giving rise to an inspiring a broader βcrypto artβ movement.
NBA Top Shot, a platform created by Dapper Labs in partnership with the basketball league, attracted $147.8 Mllion in sales in the last seven days, according to NFT data tracker CryptoSlam. The service lets users buy and sell short clips showing match highlights from top basketball players.
On last Sunday, musician and visual artist Grimes made nearly $6 million in under 20 minutes by selling her digital collection WarNymph on the NFT trading platform Nifty Gateway.
On the last day of February, electronic music producer 3LAU sold a collection of limited edition NFTs for more than $3 Million. Also, the dance music vet and cryptocurrency pundit broke the record in NFT sales by selling 33 unique items for a total of $11.6 Million.
Summary
NFT market is keeping on expanding by attracting more and more participants. It might not even be mistaken to say that ‘NFTs are the future of crypto.’ Recording triple digit growth YoY, it will be in no time that an NFT be sold for $1 Billion.
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If you are no familiar about NFT please read my NFT section – All About NFT token- What are NFT , How does NFT token work, How to Trade NFT and Where to buy NFT?
