What is Behind the NFT Explosion in 2021? NFTs, or Non-Fungible Tokens, are digitized, collectible virtual assets that represent ownership over a piece of underlying media. Transactional data for every single NFT is tracked on their respective network’s blockchain in a distributed digital ledger so that anyone can see which anonymous wallet address owns them and for how much they were acquired. While the first NFTs have been around since at least 2014, in the last year, their sales suddenly boomed at an explosive rate. In fact, according to Financial Times, by the end of the year, over $40 billion was spent on NFTs in total, making it their most successful year to date. So, what could be behind this astronomical growth?

Cryptocurrencies: How Much Higher Can They Go?

What is perhaps the biggest driving factor that is likely to have led to these record-breaking numbers is the prices of the most popular cryptocurrencies too, seeing record-breaking numbers of their own in 2021. For example, Bitcoin, the number one traded cryptocurrency, began the year at a little over $29,000 per coin, and slowly but surely increased in price to reach its current all-time high (or ATH for short) of nearly $68,000 in early November. When Bitcoin rises, generally so do other altcoins, and Ether, the second most popular crypto, also reached record highs in 2021, maxing out at an all-time high of a little over $4,800 around the same time as BTC’s latest run.

How to Grow Your Own NFT Project on the Ethereum

Concurrently, growing NFT projects built on the Ethereum network such as the Bored Ape Yacht Club and Cryptopunks began to gain more recognition and notoriety for the high prices they were fetching, and jaw-dropping numbers for NFT sales began appearing more and more in the news, including what currently holds the record for the most expensive NFT ever purchased by an individual investor – digital artist Mike Winkelmann, known by his alias Beeple auctioned off his magnum opus, “Everyday: The First 5000 Days”, an enormous digital collage containing 5,000 individual art projects he created every single day consecutively for over thirteen years at Christie’s auction in March for 42,329 ETH, or over $69 million USD at the time.

NFTs: The New Frontier of Digital Asset Trading

Once this record-shattering sale hit the news cycle, NFTs had officially gone mainstream. It seemed like every single hour there was a new NFT launch, especially on the immensely popular Ethereum network, where a massive influx of new projects began arriving in droves, many art-based generative NFTs, some utility-focused, and unfortunately, some outright scams or “rug-pulls” as they’re known in the crypto world. NFT fever was in full swing, and investors everywhere started buying them from more and more projects, each hoping theirs could become the next BAYC or Cryptopunks and bring them life-changing amounts of money.

The Risks of Investing

Now that we’ve covered some of the reasons why NFTs took off in 2021, it’s important to remember that, as with any investment, you should never invest more than you could afford to potentially lose and always do your own thorough research before deciding to invest in an NFT, as all blockchain transactions are permanent and completely irreversible.

What is the cause of the 2022 NFT Explosion?

NFTs have been around for a while, but they exploded in popularity in 2021.
The idea behind them is simple: each NFT is unique, like a trading card or signed baseball. This makes them valuable, as collectors are willing to pay for the rarest and most unique NFTs.

So what caused the 2021 NFT explosion? There are a few factors. First, the rise of blockchain technology made it possible to create and trade NFTs easily and securely. Second, major companies and celebrities began getting involved in the NFT space, which helped to legitimize it. Finally, people simply became more aware of NFTs and realized their potential value.

Whatever the reasons, there’s no doubt that NFTs are here to stay.

What caused NFTs to explode?

The explosion of non-fungible tokens, or NFTs, can be traced back to a confluence of factors.
The prolonged shutdowns, quarantines, and social restrictions meant that this effect has been ongoing for nearly two full years.
First, the pandemic forced people indoors and online en masse.
This increased both the amount of time people had to spend on the internet as well as their willingness to engage in new and novel activities within that space.
Secondly, the economic downturn that accompanied the pandemic led many people to seek out new ways to generate income.

And finally, a number of high-profile sales of NFT-based art and other items helped to legitimize the market and spur further investment.

Why will there be an NFT explosion in 2022?

With the recent release of platforms like Rarible and Opensea, it’s easier than ever to start trading your digital assets.
Non-fungible tokens (NFTs) are unique, one-of-a-kind items that can be bought, sold, or traded on these marketplaces.

For one, the adoption of cryptocurrency is on the rise.
More and more people are using Bitcoin and other digital currencies to buy goods and services online. As NFTs are usually purchased with cryptocurrency, this trend will likely continue.

Secondly, NFTs offer a level of ownership and provenance that other digital assets cannot match. When you purchase an NFT, you can be sure that you are the only person who owns that particular asset.

Why are people buying NFT artwork?

Some people invest in NFT artwork because they believe that it will hold value in the future.
They see it as a safe investment option, one that could offer a good return on their investment.

There are a number of reasons why someone might want to invest in NFT artwork. For some, it is simply a way to support the artist.
Others may see it as an investment in the future of the art world, believing that NFTs will eventually become the standard way to buy and sell art.

Whatever the reason, there is no denying that NFTs are becoming increasingly popular.
In the past year, sales of NFT artwork have exploded, with some pieces selling for millions of dollars.
As more people become aware of NFTs and their potential, it is likely that even more will start investing in them.

What is the NFT boom?

Non-fungible tokens are digital proofs of purchase for goods like art, digital music, and sneakers or access to services or clubs.
With the recent release of popular online games like NBA Top Shot, which allows users to buy, sell, and trade digital tokens that represent highlights from real NBA games, the world of non-fungible tokens (NFTs) is beginning to heat up.
So what exactly are NFTs?

In short, NFTs are digital proofs of purchase for goods or services that can’t be replicated. That means that unlike a traditional cryptocurrency like Bitcoin, which can be divided into small pieces and traded on exchanges, an NFT represents a unique item that can’t be divided or exchanged.

This uniqueness makes NFTs perfect for collectibles like art, music, or sneakers.
And because they’re stored on the blockchain (a decentralized ledger that records all transactions), they’re also tamper-proof and secure.

What will cause the 2022 NFT explosion?

With the recent release of platforms like Rarible and Opensea, it’s easier than ever to start trading your digital assets. Non-fungible tokens (NFTs) are unique, one-of-a-kind items that can be bought, sold, or traded on these marketplaces.

For one, the adoption of cryptocurrency is on the rise.
More and more people are using Bitcoin and other digital currencies to buy goods and services online. As NFTs are usually purchased with cryptocurrency, this trend will likely continue.

Secondly, NFTs offer a level of ownership and provenance that other digital assets cannot match. When you purchase an NFT, you can be sure that you are the only person who owns that particular asset.

Is NFT still booming?

NFTs, or non-fungible tokens, have seen explosive growth in 2021. But this growth hasn’t been consistent and has leveled off so far in 2022.
NFTs are digital assets that are unique and can’t be replaced.
They’ve been used to represent everything from art and collectibles to in-game items and real estate.

The market for NFTs took off in early 2021, with sales totaling $250 million in January. But since then, growth has stalled and sales have totaled just $50 million so far in February.

Chainalysis attributes the slowdown to a number of factors, including the fact that most NFT buyers are speculators who are quick to cash out when prices rise.

The reason behind the 2021 NFT explosion

NFTs, or non-fungible tokens, have exploded in popularity in 2021.
So what exactly is an NFT? And what is the reason behind their sudden popularity?

An NFT is a digital asset that is not interchangeable with any other asset.
In other words, each NFT is unique and cannot be replaced by another.
This is in contrast to fiat currency or cryptocurrencies, which are all fungible – meaning they can be interchanged with one another.

So why are NFTs suddenly so popular?

NFTs, or non-fungible tokens, are digital assets that are unique and cannot be replaced.
Unlike cryptocurrency, which can be exchanged for other cryptocurrencies or fiat currencies, NFTs are not interchangeable.

One reason is that social media platforms like TikTok and YouTube have made it easier for people to discover and trade them. Another reason is that NFTs have the potential to create a new type of economy based on ownership of digital assets.
Finally, some people believe that NFTs could help solve the problem of authenticity in the digital world.

Some experts believe that the popularity of NFTs is just a passing fad. However, others believe that NFTs could revolutionize the way we interact with the digital world.

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