NFT Market Size and Pricing

Total NFT Market Size

According to DappRadar, a company that tracks data on crypto-based applications, the NFT Market Size exceeded $10 billion in transaction volume in the third quarter of 2021. This is a steady increase since last year which shows us that the NFT market is gaining more mainstream attention as cryptocurrencies become a bigger part of the financial landscape.

How NFTs Are Priced?

There isn’t an exact science to how NFTs are priced. Ultimately, these pieces of digital collectible art are worth whatever someone is willing to pay for them. With many popular NFTs from artists like Beeple as well as the Crypto punk series of NFTs selling for millions of dollars, it is clear that certain NFTs are considered highly valuable collectibles. However, there is not much data on prices seeing as this is still a relatively new market. Over time, pricing will become more understandable but as of right now, these are the Factors Affecting NFT Price — scarcity, hedonic value, age, and popularity.

The scarcity of an NFT is often determined by the person or group that created the NFT. Some creators will choose to sell many replicas of an original NFT while others will decide to release a few limited-edition pieces. Having less of an NFT available tends to drive up the price of the NFT over time.

Hedonic Value refers to the level of enjoyment someone can get from owning an NFT. One example of this was Jack Dorsey the CEO of Twitter’s first tweet. This sold for millions because of its historical significance—making it appealing to those who want to hold a piece of history.

Age will also be a major determining factor when it comes to valuing NFTs. Some of the earliest NFTs can sell for top dollar, much like an old painting by a renowned artist from the 19th century could sell for millions. This is best exemplified by the Cryptopunks line of NFTs, which are some of the oldest and remain the highest valued NFTs on the market today.

Popularity NFT pieces that have garnered a lot of notoriety and interest will typically sell for more money. We are seeing that NFTs are being implemented in cross-platform communities that make it easier to trade among members.

With NFTs being incorporated into various formats across different blockchain platforms, we are seeing this as an effective method of creating popularity among different niches. One example is Sony incorporating NFTs into the game The Six Dragons. This is now the first blockchain open-world RPG and has paved the way for NFTs to be implemented into the multi-billion-dollar gaming market.