{"id":369489,"date":"2021-11-19T17:03:00","date_gmt":"2021-11-19T14:03:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/nft-sales-boom-but-ownership-is-highly-concentrated\/"},"modified":"2021-11-19T17:03:00","modified_gmt":"2021-11-19T14:03:00","slug":"nft-sales-boom-but-ownership-is-highly-concentrated","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/nft-sales-boom-but-ownership-is-highly-concentrated\/","title":{"rendered":"# NFT sales boom, but ownership is highly concentrated"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3493175bd10\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3493175bd10\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/nft-sales-boom-but-ownership-is-highly-concentrated\/#The_%E2%80%9Chype_machine%E2%80%9D_is_real\" >The \u201chype machine\u201d is real<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/nft-sales-boom-but-ownership-is-highly-concentrated\/#Concentrated_ownership\" >Concentrated ownership<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/nft-sales-boom-but-ownership-is-highly-concentrated\/#Will_digital_art_go_mainstream\" >Will digital art go mainstream?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># NFT sales boom, but ownership is highly concentrated <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>Trading volumes across various verticals of nonfungible tokens (NFTs) have been on a tear this year.<\/p>\n<p>Combined sales for collectible and art NFTs have reached $7.4 billion as of Q4 2021. The art NFT market has grown from $17.8 million on January 1 to $1.8 billion in total sales as of Nov. 5, 2021. At the beginning of 2021, the collectible NFT market started with a total sales volume of $55.5 million. It has since ballooned to $5.6 billion. As <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/fintech-nft-q3-idCAKBN2GU298\">reported<\/a> by Reuters, total NFT sales volumes jumped from $1.3 billion in Q2 to $10.7 billion in Q3.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/871e52f7-2c7f-483c-bc3d-d28c628816bd.png\"><\/figure>\n<p>Record sales like that of the rare Bored Ape Yacht Club NFT, which went for a record $3.4 million on Oct. 26, puts the frenzy of the NFT market into more context. The sale <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/metaverse.sothebys.com\/natively-digital\/lots\/bored-ape-8817\">closed<\/a> on Sotheby\u2019s online art auction platform Metaverse. The last record auction of a Bored Ape Yacht Club NFT <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.techtimes.com\/articles\/265122\/20210908\/bored-ape-yacht-club-nft-sells-for-record-breaking-2-9-million%E2%80%94beating-sotheby-s-recent-auction.htm\">happened<\/a> in September, closing at $2.9 million. The Oct. 26 record <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/BoredApeYC\/status\/1435976278797164551?ref_src=twsrc%5Etfw%22%3ESeptember%209,%202021\">took<\/a> place in tandem with another expectation-beating auction the same day in which a Bored Ape Yacht Club NFT collection auction of 101 pieces sold for $24.39 million.<\/p>\n<p>The Bored Ape Yacht Club NFT art <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a>, which launched in April 2021, has <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/dappradar.com\/nft\">accumulated<\/a> almost $1 billion in total sales this year, according to D<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>Radar. Sotheby\u2019s first auction of NFT artist Pak fetched $16.8 million in April as well, and Christie\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/onlineonly.christies.com\/s\/beeple-first-5000-days\/beeple-b-1981-1\/112924\">followed<\/a> with an NFT piece by artist Beeple for $69 million.\u00a0<\/p>\n<p>\u201cWhat we are seeing with NFTs is the emergence of an entirely new audience of traders into the space, driven by possibly the most friendly on-ramp to crypto ever seen,\u201d Pedro Herrera, senior blockchain analyst at DappRadar, told Cointelegraph.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_%E2%80%9Chype_machine%E2%80%9D_is_real\"><\/span>The \u201chype machine\u201d is real<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In April, the art and data <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/sciencee\/\" data-internallinksmanager029f6b8e52c=\"5\" title=\"Science\" target=\"_blank\" rel=\"noopener\">science<\/a> blog Artnome <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.artnome.com\/news\/2021\/4\/10\/in-search-of-an-aesthetics-of-crypto-art\">highlighted<\/a> the correlation between the number of views by registered collectors on SuperRare and an NFT\u2019s sale price on the platform. The authors concluded that \u201cthe hype machine is real,\u201d as data showed that the number of views by registered collectors of a work correlated to a higher sales price for the NFT.\u00a0<\/p>\n<p>There were two surges in the market this year that also coincided with solid spikes in internet searches for the term \u201cNFT.\u201d The first happened after the highest-paid price for an NFT \u2014 Beeple\u2019s $69 million auction of his photo collage \u201cEverydays: The First 5,000 Days\u201d \u2014 was sold through Christie\u2019s online auction site on March 11. It was the first NFT ever to be auctioned at a major fine art auction house, and the hype poured fuel on the market. The total monthly sales volume in the art NFT market surged from $32 million on March 1 to $83 million by April 1.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/a284aba2-8ff9-4fc3-bafa-aabe4aba0a12.png\"><\/figure>\n<p>The second surge came on July 31, when sales in the collectible NFT market increased from $1.2 billion in total all-time yearly sales to $4.65 billion by Sept. 30. The peak of the \u201cNFT\u201d search term coincided with two of the most popular AI-generated collections, CryptoPunks and the Bored Ape Yacht Club, beginning to dominate the crypto art market.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Concentrated_ownership\"><\/span>Concentrated ownership<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In a May 2021 New York Times op-ed, Hungarian network scientist Albert-L\u00e1szl\u00f3 Barab\u00e1si <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2021\/05\/07\/opinion\/nft-art-market.html\">described<\/a> his analysis of transactions that took place on the SuperRare crypto art NFT marketplace platform.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/c4c51eb9-c4d4-445c-b18a-a4fed2b0a95e.png\"><\/figure>\n<p>In the analysis, Barab\u00e1si examined the number of co-owned art NFT transactions between collectors on the platform. He defined co-owned art NFTs as art NFTs that had been bought and sold between more than one collector through SuperRare. He analyzed each artwork as a \u201cnode\u201d on a \u201cnetwork\u201d of transactions between registered SuperRare collectors to see how many of the same pieces had been owned by different collectors.\u00a0<\/p>\n<p>His reasoning was that art collectors typically collect and trade in one type of art, whether a particular artist, style, genre or medium. Therefore, he hypothesized that there were only a small group of collectors making the purchases of the high-end art NFTs.\u00a0<\/p>\n<p>As it turns out, he was correct. Barab\u00e1si found that a group of four collectors owned most of the works with only three degrees of separation between any one of them and the 16,000 works of art they collected.<\/p>\n<p>In a report <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/github.com\/bugout-dev\/moonstream\/blob\/main\/datasets\/nfts\/papers\/ethereum-nfts.pdf\">released<\/a> by crypto analytics firm Moonstream that analyzed transactions on the Ethereum blockchain between April and the end of September, the authors found that there is great inequality in the Ethereum NFT market, with the top 16.71% of NFT owners controlling 80.98% of the NFTs.\u00a0<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/354915de-7efc-4efa-9f94-09ff2ebc0cdf.png\"><\/figure>\n<p>Furthermore, most of those purchases are for NFTs with more extrinsic than intrinsic utility \u2014 think utility tokens like name service NFTs \u2014 that have a common functionality on-chain versus rare CryptoPunks collectible NFTs going for seven figures.<\/p>\n<p>The report also discovered that 83.29% of the addresses which assumed ownership of an NFT, did so for less than 10 Ether (ETH).\u00a0<\/p>\n<p>Even though the Moonstream data looks at the broader NFT market, it seems to support Barab\u00e1si\u2019s analysis that, for the higher-end, intrinsically-valued crypto art market, there is a small, tight club of whales who own the majority of the NFTs. Many of these owners are collectors and marketplaces. But, the report also noted that the barrier to entry for the NFT market is low, and disbursement of NFT ownership is correlated to the level of extrinsic utility of the NFT.\u00a0<\/p>\n<p>In a poll conducted by The Harris Poll and Adweek in April, 40% of the 1,088 participants surveyed said they were \u201cfamiliar\u201d with NFTs and 81% said they were aware of NFTs.<\/p>\n<p>\u201cOverall, not many Americans have jumped on the NFT bandwagon yet \u2014 only 12% of respondents said they\u2019ve invested in the digital collectibles. But among millennials, that number\u2019s a bit higher: 27% say they\u2019re currently investing in NFTs. Millennials are also the most likely cohort to invest in cryptocurrencies at 37%,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theharrispoll.com\/nfts-are-all-the-rage-but-whos-actually-buying-them\/\">according<\/a> to the poll.<\/p>\n<p>\u201cPredictably, those who consider themselves \u2018collectors\u2019 are also more likely to want a piece of the shiny new digital collectible pie. For overall collectors, 22% said they own NFTs, and for collectors with more than $100,000 in annual income, that jumps to 33%.\u201d<\/p>\n<p>As conveyed in the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.hiscox.co.uk\/sites\/default\/files\/documents\/2021-10\/21674a-Hiscox_online_art_trade_report2021-part_one_1.pdf\">Hiscox Online Art Trade Report for 2021<\/a>, the current situation in the market has become hard for many art veterans to understand due to the current values of CryptoPunks and Bored Ape Yacht Club pieces at auction. Many do not know what\u2019s hype and what is not. Perceptions are changing, though. The report\u2019s survey of art auction houses and online websites found that 14% of art marketplace platforms already offer NFTs for sale on their platforms, with another 38% surveyed stating that they are planning to do so soon.\u00a0<\/p>\n<p>According to the report, there is speculation that the traditional and crypto art markets could merge into a permanent hybrid experience where physical art galleries showcase crypto art and traditional artworks are digitized and sold online. This year, at least four of the most expensive crypto art sales took place on traditional online art auction platforms.<\/p>\n<p>Bobby Ong, co-founder and chief operating officer of CoinGecko, told Cointelegraph:<\/p>\n<blockquote><p>\u201cPerhaps one of the biggest signs of traditional art collectors entering the NFT market is the fact that traditional auction houses like Christie\u2019s and Sotheby\u2019s are conducting NFT auctions and bridging the gap between NFTs and art collectors.\u201d\u00a0<\/p><\/blockquote>\n<p>Besides the pandemic, the report highlighted two instigating factors fueling the proliferation of the crypto art market in 2021. First, two of the major traditional art auction houses, Christie\u2019s and Sotheby\u2019s, began accepting cryptocurrency as a form of payment. The use of cryptocurrency as payment was a way for the two auction houses to attract and cater to wealthy crypto investors.\u00a0<\/p>\n<p>Secondly, NFTs provide artists with a public ledger that creates proof of title and authenticity for their work. Besides protecting against theft and forgery, this allows artists to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/primaryinformation.org\/product\/siegelaub-the-artists-reserved-rights-transfer-and-sale-agreement\/\">collect<\/a> royalties in the secondary NFT art market.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Will_digital_art_go_mainstream\"><\/span>Will digital art go mainstream?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With individual CryptoPunk NFTs going for seven-figure price tags, what will it take for the art and collectible NFT markets to go mainstream?<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/87d82e3c-f42c-46f1-b168-4ed7dcd568a5.png\"><\/figure>\n<p>In the April 2021 post on Artnome, the authors stated one of crypto art\u2019s greatest achievements so far has been to \u201cpuncture the illusion of contemporary art as a space for \u2018high\u2019 culture.\u201d The authors also voiced their intention \u201cto point a way beyond the current situation, in which speculation appears to be as much a driver of art\u2019s value as the works themselves.\u201d\u00a0<\/p>\n<p>As DappRadar\u2019s Herrara said, \u201cIt\u2019s important to draw lines between different types of NFTs. Sure, a CryptoPunk is now the equivalent of a Picasso. Therefore it\u2019s outside most people\u2019s financial reach. However, new and exciting collections, with the potential to become as valuable as CryptoPunks arrive daily with price tags under $400. So frankly, you don\u2019t need millions in your wallet to get involved.\u201d<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"nifty_newsletter\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/nft-sales-boom-but-ownership-is-highly-concentrated\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# NFT sales boom, but ownership is highly concentrated &#8221; Trading volumes across various verticals of nonfungible tokens (NFTs) have been on a tear this year. Combined sales for collectible and art NFTs have reached $7.4 billion as of Q4 2021. The art NFT market has grown from $17.8 million on January 1 to $1.8&#8230;<\/p>\n","protected":false},"author":1,"featured_media":369490,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvZTI0MGVmODgtY2U2Mi00OWUzLTk0NzQtOTUyOWUyYTEzMDU3LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[95118,74892,74355,116,55649,117,73711,71407],"class_list":["post-369489","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-nft","tag-tokens","tag-adoption","tag-art","tag-artists","tag-business","tag-investments","tag-trading"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/369489","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=369489"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/369489\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/369490"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=369489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=369489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=369489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}