Thanks in large part to a recent funding round, OpenSea, the world’s largest NFT marketplace, is now valued at $13.3 billion. This tremendous growth comes after a valuation of a mere $1.5 billion just six months ago. Thanks in large part to the increasing attention placed on cryptocurrency and digital currency in general, more and more people with celebrity status and wealth are investing in previously obscure or dismissed forms of financial capital.
NFTs for the Win
OpenSea is primarily making its fortune in NFTs. Because a non-fungible token is a digital item that is unique to itself and cannot be replaced, some see it as being far more valuable than regular currency. Typically, NFTs are pieces of digital art. Over the summer, someone paid $390,000 for a 50-second video by Grimes. Another collector paid $3,600 for a Gucci embossed ghost. But, others have pushed the boundaries of what is a valuable NFT. Recently the founder of Twitter sold an autographed tweet as an NFT.
OpenSea Community
OpenSea has caught on like wildfire because it is building a community around NFTs and has been one of the main drivers in generating excitement about the movement toward digital art. Common wisdom tells us that a thing has value because people agree that it does. Right now, a lot of people with the right kinds of connections are agreeing digital art in the form of NFTs is really valuable, hence why the primary marketplace of those NFTs would be deemed extremely valuable.
Why $13.3 Billion?
Art and crypto combined make for a very profitable business. In recent months, crypto-focused startups have grown in staggering popularity, and as OpenSea is the largest platform to deal in the trade of digital art, it makes sense that the two would intersect and explode onto the tech scene.
The latest round of funding has been led by the investment firms Paradigm and Coatue Management, but they are not alone. Actor Ashton Kutcher and the investment firm Andreesen Horowitz also contributed to a recent increase of $100 million. OpenSea is ripe for investment right now, and many people want in on the next big idea. As a result, OpenSea grew from just $1.5 billion to $13.3 billion in just six months.
The Future of NFTs and OpenSea
As for where it’s all headed, only time will tell. OpenSea has been around since 2007 and is only just now taking off toward real revenue. However, OpenSea is facing the looming threat of some serious competition.
Just this week, LooksRare launched its NFT marketplace and token with great success, which could chip away at OpenSea’s usership as some frustrated NFT collecters look for an alternative platform to sell their NFTs. The launch of Coinbase NFT is also just around the corner.
Coinbase’s 73 million verified user count has the ability to crush OpenSea’s dominance of the NFT market, especially if they launch a rewarding, user-friendly platform. Now that OpenSea has pulled ahead in the NFT race, they will have to work extremely hard to maintain that lead.
