The NFT marketplace has achieved a stunning valuation of more than US$13 billion merely four years after its launch.
Online non-fungible token (NFT) marketplace OpenSea is now worth US$13 billion, following a new investment of US$300 million in a Series C finance round led by hedge fund sponsors Paradigm and Coatue. Half a year ago, OpenSea was only valued at US$1.5 billion.
The NFT marketplace is the leading platform and online community for artists and developers to sell their digital artwork as NFTs to art collectors and speculative investors. The company has recorded over US$14 billion in all-time sales across more than one million traders worldwide, which is a lot higher than any other NFT platform, such as Axie Infinity which has a US$3.94 billion all-time sales.
Rise of interest in NFTs
The reason for OpenSea’s increased valuation is because of the heightened popularity of NFTs over the past year. NFTs have become more appreciated by a broader consumer audience, ranging from collectors to investors, and NFT trades have risen 600-fold in 2020.
In 2021, the NFT market generated more than US$23 billion in trading volume. Starting the year there were only around 5,000 active wallets engaging with NFTs every day, but by the end of 2021, that number rose to more than 140,000.
For OpenSea, the NFT marketplace’s trading volume achieved a whopping US$3 billion in August 2021, which is an 800% increase compared to the previous month’s volume.
Hosting the most popular and expensive NFT projects
OpenSea’s valuation is especially accelerated by the success of popular projects, such as the Bored Ape Yacht Club (BAYC). Subsequent to the launch of the collection, the daily trading volume on the marketplace reached an all-time high of over US$320 million.
The BAYC collection consists of thousands of anthropomorphic ape avatar NFTs with different traits and attributes. What makes the Club prestigious is that the minimum cost of entry is 93 Ether (as of writing this article), which is about US$232,000. Late-night TV host Jimmy Fallon, NBA star Stephen Curry, singer Post Malone and rapper Eminem (who spent about US$460,000 on a Bored Ape graphic that looks like him) are all members of the Club, having dropped hundreds of thousands of dollars for the digital artworks.
Following the funding announcement, the OpenSea team said the proceeds would be used towards “accelerating product development” and “investing in the wider NFT and Web 3.0 community.” Co-founder and CEO of OpenSea, Devin Finzer, said, “Our ambition is to foster the scale and growth of the broader NFT ecosystem, including raising the profile of emerging creators and investing in the people who shape the NFT space for the better today.”
The company also promised to improve its clients’ support policies by scaling up its customer support and safety teams. NFT artists often encounter frustrations when reporting copyright infringements of their artworks on OpenSea. The new proposal may possibly be more helpful in helping registered artists detect stolen NFT artworks.
Header image courtesy of Unsplash