The renowned internet service platform, eBay, is venturing into the space of digital collectibles by becoming a hub for purchasing and selling non-fungible tokens (NFTs). This move came about through the acquisition of KnownOrigin, an established NFT marketplace.
The surge in NFT sales
Nonfungible.com, a data provider, reports that the sales of NFTs experienced an explosive growth of 21,000% in 2021, hitting over $17 billion. Some industry estimates even place this figure at a higher level. DappRadar, a market analyst, records last year's NFT sales as roughly $25 billion. Individual NFTs have fetched staggering prices, with the highest single sale going for an incredible $69 million in a transaction overseen by esteemed auction house Christie's.
Role of Blockchain in NFTs
NFTs leverage the technology of blockchain to authenticate ownership and prevent duplication of the digital assets.
How eBay plans to incorporate KnownOrigin
In acquiring KnownOrigin and its robust technology, eBay intends to offer a platform where users can trade NFTs globally. This strategic acquisition is expected to amplify eBay's ongoing initiatives that focus on collectibles. The move mirrors the company's initiative from June that introduced a vault service designed to safeguard customers' physical assets such as collectible figures, high-value sports cards, shoes, and more.
The current investment potential of eBay
While the purchase of KnownOrigin presents an exciting new avenue for eBay, it doesn't automatically render the company an excellent investment choice. True, the influx of NFT transactions could potentially stimulate sales on eBay's platform. However, it's worth noting that the growth of the NFT market has substantially slowed down in 2022.
Recently, eBay has been experiencing a decline in its buyer base. Increased inflation is leading many consumers to curtail their spending habits. Moreover, the collectibles market isn't as vibrant as it was during the early pandemic phase.
Investors might want to observe how eBay's new strategies unfold before making investment decisions.