NFT sales surge to $10.7 billion in Q3 as crypto asset hits new highs

Sales volumes of non-fungible tokens (NFTs) surged to $10.7 billion in the third quarter of 2021, up more than eightfold from the previous quarter, according to data from market tracker DappRadar, as the frenzy for crypto assets reached new highs.

NFTs use blockchain to record the ownership of digital items such as images, videos, collectibles and even land in virtual worlds.

Surging sales and hefty prices on NFTs - items which do not physically exist - have baffled many but the explosive growth shows no sign of abating.

The third-quarter figure was up from $1.3 billion in Q2 and $1.2 billion in Q1, DappRadar said.

On the biggest NFT marketplace, OpenSea, sales volumes hit $3.4 billion in August. Activity remained strong even in September when global stock markets faltered.

Cryptocurrency price gains during the COVID-19 pandemic are often cited as a driver behind the NFT market's growth -- because people use cryptocurrencies to buy NFTs -- but enthusiasts say that the crypto assets have value independently of market conditions.

To be sure, estimates for the size of the NFT market vary depending on what is included. Transactions which take place "off-chain", such as NFT art sales at auction houses, are often not captured by the data.

DappRadar's numbers, which include multiple blockchains and "off-chain" transactions, put total 2021 sales volume at $13.2 billion. Another market tracker, CryptoSlam, which excludes "off-chain" sales, says the figure is $9.6 billion.

Meanwhile, NonFungible.com, which tracks NFTs on the ethereum blockchain only, puts the 2021 total volume at $7 billion.

The most expensive known NFT sale was a digital collage sold at Christie's for $69.3 million in March. Since then, no known NFT has come close to this price, but auction houses still hold NFT sales, often fetching millions.

However, despite growing sales and celebrities and other investors jumping on the trend, the number of NFT buyers remains relatively small: there were just 265,927 active wallets trading NFTs on the ethereum blockchain in Q3, NonFungible.com said.

More than half of NFTs sold in Q3 were $101-$1,000, while those in the $1,001-$10,000 bracket accounted for 20% of sales, and 17% fetched less than $100, NonFungible.com said.

One NFT brand to see particularly high growth in Q3 was Art Blocks, a U.S.-based project which sells NFTs of algorithmically-generated digital artworks.

On Saturday, an Art Blocks NFT sold for 2,100 ether (around $6.9 million at the time). Average Art Blocks prices have risen to roughly $15,100 per NFT in September, up from $3,300 in July, according to CryptoSlam.

Gaming-related NFTs also surged, with the blockchain-based game Axie Infinity leading the "play-to-earn" sector with $776 million in Q3 revenues, DappRadar said.