Non-fungible tokens have exploded in popularity with files selling for millions, and now big-name investors want in on the action.
OpenSea, a marketplace for non-fungible tokens or NFTs, has raised $23m as the buzz around crypto marches on.
NFTs are digital blockchain-authenticated files that have ballooned in popularity of late as a way to sell verified digital goods.
One art piece fetched more than $69bn in an auction for what is essentially an image file. Meanwhile Twitter founder Jack Dorsey is auctioning off his first tweet and giving the money to charity.
OpenSea was founded in 2017, predating the current froth around crypto and blockchain, but this latest wave of mainstream attention for the technology has attracted the eyes of many big-name investors.
Andreessen Horowitz has led the round, with Mark Cuban, Reddit founder Alexis Ohanian and AngelList co-founder Naval Ravikant among the other investors.
OpenSea has built an Amazon-like marketplace for selling digital items. The idea emerged in 2017 during the CryptoKitties fad, a precursor to the NFT craze of 2021, where people could buy and trade virtual cat characters on the Ethereum blockchain.
Chief executive Devin Finzer said NFTs are a new way for creators, artists and musicians to sell their work – Kings of Leon are releasing their new album as an NFT, for example.
According to Finzer, OpenSea has seen transaction volumes on its marketplace grow 100 times over the last six months. “The world is waking up to the power of this technology, and it’s happening quite suddenly,” he said.
“At OpenSea, we are growing and shaping this economy by building the world’s best, largest and most trusted marketplace for this new type of digital asset.”
He envisions OpenSea being the entry point for people that are interested in NFTs but don’t know where to start.
OpenSea’s ability to attract such an impressive pool of investors indicates the buzz going on in the broader cryptocurrency and blockchain sector.
Bitcoin has reached dizzying heights of $60,000 in the past week with a market cap exceeding $1trn, while major Wall Street firms are no longer looking at the digital asset with a sideways glance. Morgan Stanley is reportedly offering its wealthy clients access to bitcoin funds and Deutsche Bank said bitcoin is now “too important to ignore”.
Coinbase, one of the world’s largest cryptocurrency exchanges and arguably one of the companies responsible for first bringing bitcoin to a mainstream audience, is going public in the coming weeks and is expected to net a significant valuation.