The NFT market has exploded over the past year, with sales reaching almost $100 million in 2020, a staggering 30,000% increase from the previous year. Today, the NFT market cap sits at around $20 billion. At the forefront of this booming market is OpenSea, the largest NFT marketplace with a valuation of $14 billion.
Despite having only 70 employees, OpenSea generated a staggering $27.5 billion in sales for 2021, thanks to an average daily fee of $4.2 million. With a 2.5% service fee, OpenSea is highly profitable, raking in hundreds of millions in revenue. Such success has attracted criticism, with some arguing that the NFT market is overheated, and companies like OpenSea are prime examples of this.
Despite the challenges and criticisms, there is no denying that the NFT market is here to stay, and OpenSea's success is a testament to this. As the market continues to evolve, it will be interesting to see what new innovations emerge and how OpenSea and other NFT marketplaces adapt to stay ahead of the curve.
TAM of the NFT photography market
Despite facing difficult market conditions, the photography NFT market had a strong year in 2022, with sales reaching 22,000 ETH or $47 million, a 33% increase from the previous year. While the trailing volumes in the final quarter of the year declined 64% compared to their peak in April, the second half of the year saw a particularly strong performance, with 13,500 ETH in sales.
However, the sustainability of royalties as a source of income remained a key challenge for photographers in 2022. While photographers earned a total of 800 ETH in royalties, ten collections accounted for 85% of this total, leading to a drying up of liquidity in the market in the second half of the year. Despite this, 50 photographers still managed to earn 50 ETH or more, with the top 50 earning a total of 10,000 ETH or $27 million.
Collectors also faced a difficult year, with only 10 major collections trading above their 2021 levels and 90% of collections losing value in 2022. However, editions had a strong year, grossing 2,600 ETH or $7.2 million, and 15 photographers set new all-time highs for their premium 1/1s on SuperRare, with the average all-time high increasing by 61%.
New talent was also on the rise, with over 100 new photographers having their first sale on SuperRare in 2022 and more than 3,000 people collecting photography. Galleries such as Fellowship Trust and MONOLITH Gallery helped iconic photographers enter the web3 space and attract new collectors, while Quantum NFT played a significant role in onboarding new collectors, launching 60+ collections, and earning their artists 2,000+ ETH.
Finally, it's worth noting that five photographers sold their work at the most prestigious auctions in 2022, fetching prices that were 30-40% below those achieved on SuperRare. This highlights the potential for NFTs to revolutionize the art world and create new opportunities for both creators, curators, and collectors. Despite challenges and fluctuations, the photography NFT market continues to show resilience and potential for growth in the years ahead.
- Contemporary Art has offered an annual return of 14% over the last 25 years. (Source: CNBC)
- From 1985-2018, returns from the Art Market have been about the same as those of high yield bonds. (Source: Citibank)
- Art as an asset is attractive over the long run as it is a store of value that generates moderate positive real return.(Source: Deloitte)
- Art can function as a risk-reducing element in a portfolio because of its low correlation to equities or bonds.(Source: Barclays)
- The Art market showed great resilience under continuing uncertainty in 2021. (Source: Art Basel & UBS)