Why banks are suddenly interested in the $2bn Ethereum NFT sector

„Only a matter of time before we see the first millionaires“: a private subsidiary of the French bank took a liking to the fast-growing NFT sector (300% growth in NFTs!) in its latest note.
The next boom?

Non-fungible tokens (NFTs) were just covered in a report published by L’Atelier, an independent subsidiary of French legacy bank BNP Paribas, last week. The crypto sub-sector has gone from strength to strength over the past year – building on a much bigger run in the DeFi sector.

BNP Paribas is the 8th largest bank in the world by total assets and currently operates with Bitcoin Trader a presence in 72 countries. As such, the bank’s L’Atelier division identifies market opportunities in digital and virtual markets and publishes research and analysis on new segments.

Now NFTs caught the department’s attention. For the uninitiated, this sub-sector consists of blockchain-based digital assets that represent the ownership (and uniqueness) of a wide range of tangible and intangible items. These can include digital art cards like Cryptopunks and Hashmasks, or entire virtual countries like Axie Infinity.

„The people we are seeing at the moment are actually benefiting from non-fungible tokens. For the first time last year we saw portfolios and profits in the hundreds of thousands of dollars. I think it’s only a matter of time before we actually see the first millionaires,“ Nadya Ivanova, COO of L’Atelier, said in the report.

She added that the sector represents a unique and emerging opportunity for banking products in the long term, i.e. in the next 10-15 years.

The report itself is a 140-page analysis of the growing NFT ecosystem, divided into 11 sections, covering everything from global market activity to upcoming trends and forecasts for the coming years. All data was sourced from NFT platform NonFungible.com.

Highlights include rising trading volumes for NFTs in 2020, with data showing that these one-off volumes passed the $250 million mark last year, an estimated 400% increase over 2019.

The NFT train has just taken off

Metrics suggest the sector will be no less successful anytime soon. Data on NFT tokens shows that the sector’s 24-hour trading volume hit the $700 million mark yesterday – for the tokens, not the NFTs themselves.

Most of these platforms are based on Ethereum (Go to Buy Ethereum Guide), the world’s most widely used blockchain, with only two dedicated „mainnets“ in the top 25 NFT platforms. The largest of these is Decentraland (MANA), a virtual land game with a market cap of $480 million, with Enjin (ENJ) following in second place with $450 million.

The NFT sector as a whole is up 74% in the last month, the data shows.

However, not everyone is enthusiastic. Among the critics is Litecoin creator Charlie Lee, who said yesterday that NFTs have no intrinsic value.

According to Lee, the market will therefore crash and go to zero.

Ethereum saw the largest inflow of funds in the first week of February.

ETH brought in $ 195 million, while BTC brought in $ 42 million

Investors are increasingly confident in Ethereum’s fundamentals, according to CoinShares researchers.

According to data from CoinShares, Ethereum brought in $ 195 million in weekly inflows. The report found that investors are “unusually focused” on assets.

A new report from CoinShares , released on February 8, shows that recent investments have heavily favored Ethereum. The second-largest cryptocurrency on the market attracted $ 195 million in investment in the first week of February, which shocked other assets.

The total entry into the market stands at $ 2.6 billion, already more than a third of the total of $ 6.7 billion for 2020. The year 2021 has started on an extremely bullish note and so trends current continues, it could be the biggest year on record in the cryptocurrency market.

The largest flows come from Grayscale Investments , which is the best-known of institutional crypto providers

The company accounted for nearly $ 200 million in weekly admissions, or about 80% of all major vendors.

At $ 42 million, the weekly Bitcoin inflow is also at its lowest level since the first week of January. Polkadot followed Ethereum and Bitcoin, albeit far behind, with an influx of $ 4.4 million.

The large influx of capital into Ethereum could be the result of the flourishing decentralized finance (DeFi) market. However, CoinShares researchers note that investors prefer to keep a stranglehold on profits. Ethereum is the backbone of the DeFi market, which is proving just as promising, if not more, than in 2020.

Institutional investments have largely contributed to the growth of the market over the past six months. Several companies and hedge funds, including BlackRock, have opened up to Bitcoin as a legitimate investment vehicle. This, in turn, has driven the market forward, creating a domino effect that regularly attracts top individuals and businesses.

Among those examples is Tesla, which bought Bitcoin for $ 1.5 billion , according to an SEC filing. Its CEO Elon Musk, who is no stranger to the crypto headlines, has made his support for digital assets clear. Bitcoin even briefly crossed the $ 1 trillion market mark, hitting all-time highs above $ 47,000.

If more such news arrives, Bitcoin’s recent double-digit rise is likely to continue. BTC is the fundamental asset of the market, the profits of which have historically been injected into altcoins.