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.