BNP Paribas studies NFT

In 2020, the market’s trading volume on Non Fungible Tokens (NFT) exceeded 200 million euros, a fourfold increase compared to 2019. NFT represent a total market capitalization of 275 million euros and consist mainly of digital token versions of artwork, music, games and collectibles. This according to study by L’Atelier, an analytical team of the French banking giant BNP Paribas, performed with NonFungible.com. The study included a review of global market trends, profitability and forecasts.

Nadya Ivanova, Chief Operations Officer of L’Atelier comments on the study that produced a 140-page in-depth analysis of NFT: “We really look at what is emerging out there and are trying to inform the strategic direction of BNP Paribas. Why is this interesting for a bank? If you think about most banking products, they are actually long-term products. So we need to understand what the world will be like not just in five years, but actually 10 to 20 years from now, given the emerging technologies and the socio-cultural changes that we see.”

NFT’s are unique

NFT’s are just like any other cryptocurrency such as bitcoin. They use transparent blockchain to prove that the tokens are scarce and sometimes even unique. You can compare them with trading cards, paintings or other collectibles. The big difference with bitcoin is that each token is unique and cannot be exchanged for each other. With bitcoin it does not matter whether you have bitcoin a or bitcoin b, they are the same and represent the same value.

Ivanova explained that major global brands influence the growth in popularity of NFT’s. There are now NFT’s based on the intellectual property of well-known brands such as NBA, Nike, various football clubs and Formula 1. Though sports collectors may not yet know exactly what NFTs are, by their interest in these digital collectibles they showcase the true attitude of traders and collectors.

But unlike so-called meme investors who make investment decisions based on hype rather than the underlying fundamentals, these newbies know the rules of the game. “People that we see currently are actually truly profiting 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 just a question of time until we actually see the first millionaires,” Ivanova said.

Connecting passion

Crypto art, one of the fastest growing segments of the NFT ecosystem, exploded in October 2020 when Christie’s auctioned the digital portrait of Satoshi Nakamoto, “Block 21”. This became the first time that a major auction house sold blockchain-related artwork. “Block 21” sold for $131,250, ten times its estimated value.

According to cryptoart.io, 15 artists who publish their work on blockchain have already passed the $1,000,000 mark in earnings. The artist Beeple is topping the list, with more than $8 million in sales.

The study by l’Atelier anNonFungible.com further states that NFT’s not only represent financial value, but that owners have are personally involved as well. NFT connects users and buyers who share the same passions, be it artwork or video games.