NFTs – El Dorado or fool’s gold?
February 14, 2022 - In 2021, more than $44 billion was spent on non-fungible tokens, making the market for digital artwork almost as valuable as the global art market. Swiss investment bank UBS estimates the global sales of art and antiques at $50.1 billion in 2020.
An NFT is unique data used to certify a digital asset’s ownership. Blockchain technology -- usually the Ethereum blockchain -- is used to mint or create NFTs.
NFT mania hit in March, when a digital collage by the artist Mike Winkelmann -- also known as Beeple -- sold for $69.3m at Christie’s, in the first sale of its kind at the auction house. It was the third-most-expensive work of art sold by a living artist and the most expensive digital asset traded as an NFT.
The U.S. basketball league, the NBA, created its NFT marketplace for buying, selling and trading video highlights of its players called NBA Top Shot. Other collections of NFTs, including “CryptoPunks” and “Bored Ape Yacht Club” (BAYC), also went viral in 2021.
The past year has seen the NFT market explode. NFTs of BAYC surged from less than $8,500 to more than $247,000 in just seven months. On February 7, a Bored Ape nifty, made by the U.S.-based company Yuga Labs, sold for $382,472.
On Monday (February 14), British tax authorities revealed they had made their first seizure of NFTs in a crackdown on suspected criminal activity to hide money.
Her Majesty’s Revenue & Customs seized three NFTs and arrested three people during a £1.4 million ($1.9 million) fraud attempt.