NFT craze gathers pace as returns hit 42 per cent in November
Investors who bet big on NFTs were treated to bumper returns in November as the digital tokens outperformed the rest of the crypto market.
Last month market sentiment was dampened after Bitcoin hit a new all time high of $69,000 before making a hasty retreat. Despite investor fears of a bear market NFTs kept momentum going and outperformed the market for the third consecutive month with returns of 42 per cent, taking 3-month returns to 171 per cent according to data from crypto exchange Kraken.
“Since NFTs first captured mainstream attention earlier this year, the realizable potential of the underlying technology has gone from strength to strength,” commented Pete Humiston, manager of Kraken Intelligence.
“The idea that NFTs could underpin such things like virtual real estate in a decentralized Metaverse has really captured investor’s imagination and may help explain the subsector’s consistent outperformance since the start of September,” Humiston added, referencing the strong performance of NFTs such as SAND which jumped by 330 per cent on the back of news the project would partner with Adidas.
The NFT market has exploded in 2021 with an estimated $26.9bn worth of cryptocurrency sent to Ethereum addresses associated with NFT marketplaces and collections so far this year.
In recent months the NFT space has also witnessed a proliferation of new projects. The number of active NFT collections on the world’s largest marketplace Opensea peaked at 2,300 in the week ending 24 October, up from 193 at the start of March according to data from Chainalysis.
The non fungible art works have caught the attention of major brands and celebrity A-listers alike with ‘NFTs’ proving their growing cultural salience by being named word of the year by Collins Dictionary.
With innovative uses of blockchain technology and altcoins becoming increasingly popular with crypto investors Bitcoin’s market dominance slipped to a two month low of 41.7 per cent on 25 November Kraken data revealed.
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