Currently, Venture capitalists are investing much in the startups in the booming NFT space. Basically, NFT or non-fungible tokens are those that gained their popularity this year in tandem with the rise in the value of cryptocurrencies like bitcoin and ether. They are the kind of digital assets that have been designed to keep track of the ownership of a unique virtual item. These are a piece of art or sports trading cards by making use of the blockchain technology.
It is found in the last year, the almost total value of NFT transaction quadrupled to $250 million as per the data from Nonfungible.com. In the last month, almost the overall NFT sales volume enhanced by $220million.
Moreover, this trend didn’t go unnoticed by the investors who have already invested around $90 million into NFT and digital collectibles companies till 2021. This report has been collected as per CNBC. However, it has now almost triple the $35 million which was raised in the last year.
However, the larger deal was for the Sorare which was a blockchain-based fantasy football game that has raised around $50 million in the month of February from VC heavyweights like BVenchmark and Accel as well as soccer star Rio Ferdinand.
Andrei Brasoveanu, a general partner at Accel mentioned, “It’s one of the most exciting developments we’ve seen in crypto for years.” Also added, “It’s one of those developments that have mass-market appeal and could potentially impact a world outside the crypto niche.”
Undoubtedly, the second biggest investment this year was in OpenSea, an NFT marketplace that bagged $23 million led by Andreessen Horowitz last week.
However, space might be set for attracting millions more in venture capital funding. As per the report, it is found that the blockchain firm Dapper Labs is now seeking a $250million cash injection with a valuation of $2 billion. This acted as a boost for the company from demand for NBA Top Shot digital collectibles platform which has been created in partnership with the U.S. basketball league.
CEO and founder of Dapper Labs, Roham Gharegozlou has called the report “baseless rumor” and Hedge refused to comment.
Now, it is quite easy to find out why startup investors are now tempted by NFT space. Currently, the market is growing at a rapid speed as some of the digital collectibles have been sold for millions of dollars. On the other hand, alongside a rally in cryptocurrencies like bitcoin and ether. Ether is the one that is often used to trade NFTs.
In the last week, Twitter CEO Jack Dorsey has sold the first-ever tweet for more than $2.9 billion on the “Valuables” platform that runs by the blockchain company Cent. In the meantime, auction houses Christie’s ran an auction for the virtual work which was sold for $69 million.
However, the NFT space yet has met skepticism from some creators and investors. As per the critics view another crypto fad that will eventually fade into insignificance. Moreover, there were no worries about the potentiality of market manipulation which may similar to the one that is found in the traditional art world. In the meantime, the Environmentalists have been alarmed at the energy needed to fuel the NFT market.