Non-fungible token (NFT) sales have surged in the past couple of months, which suggests the NFT craze that gripped the space months prior isn’t just a fad. The niche crypto-asset exploded in popularity earlier this year, and the hype wave has reached new heights in the second half of the year. The leading NFT trading platform saw record sales volumes of over $1.9 billion in August. That number is more than ten times the amount generated in March. It’s led to a new wave of excitement in various cryptos as a by-product of its hype.
NFTs first surfaced with the launch of CryptoPunks, the world’s first digital art marketplace, in 2017. Fast forward to 2021, and the OpenSea marketplace surpassed $49 million in volume on August 1. The hype wave is unlikely to fizzle out soon, as more creators, celebrities and companies jump in on the action.
Ethereum (CCC:ETH-USD) is the primary blockchain network supporting the minting of NFTs. Because of this, the top platforms usually deal in the Ethereum token. However, other cryptos are becoming popular in the niche as well.
- Polygon (CCC:MATIC-USD)
- Binance USD (CCC:BNB-USD)
Cryptos to Buy for the NFT Craze: Ethereum (ETH-USD)
Ethereum is the second-largest cryptocurrency by market capitalization and has some of the best utility. It is instrumental in the decentralized finance space and hosts most NFTs and digital assets. Moreover, its move towards a proof-of-stake system will significantly reduce its energy requirements. The ETH token rose about %388 year-to-date (YTD) as of writing.
Ethereum is the most widely used cryptocurrency in minting NFTs and in NFT marketplaces. The top marketplaces such as OpenSea, AtomicMarket, Rarible and others use Ethereum as the primary medium of trade.
Ethereum will become even more potent once it completes its transition to a proof-of-stake model next year. This would result in greater efficiency, reduced costs and a considerably lower carbon footprint. It will also increase the platform’s ability to handle more transactions. This is done through the process of sharding, which reduces network congestion through the creation of smaller chains.
Polygon is a second-layer solution that basically serves as a scaling platform for Ethereum. The crypto facilitates off-chain transactions, which positively impacts the robustness of smart contracts. It calls itself “Ethereum’s internet of blockchains.” The MATIC token has witnessed an incredible run-up so far this year, experiencing growth of over 8,100%.
Polygon is starting to gain traction in the NFT market as well. It is now a medium of trade in few NFT marketplaces such as OpenSea. Additionally, it partnered with Rario, an NFT marketplace based on the sport of cricket. The platform has been gathering momentum lately with projects utilizing its architecture in decentralized apps, sports betting apps, online casinos and more.
Billionaire Mark Cuban has recently invested in Polygon, which is an indication of its long-term growth runway. Additionally, over 350 applications are running on the network, including the top decentralized finance projects such as SushiSwap and Aave.
Cryptos to Buy for the NFT Craze: Binance USD (BNB-USD)
Binance is a USD-backed stablecoin regulated by the New York State Department of Financial Services (NYDFS). The crypto is issued by Binance, one of the largest crypto trading platforms.
Stablecoins are types of digital assets that are connected to a stable asset. The most common of these assets include government-issued currency and precious metals. They tend to be safer than other cryptos as you don’t need to worry about price plummeting.
BUSD is becoming popular in certain NFT exchanges as well. The stable coin can follow in the footsteps of Ethereum and MATIC by carving a niche in the NFT industry. However, it’s still early days at this point.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.