Leading U.S. crypto exchange Coinbase Global Inc launched its NFT market on Wednesday, in a sign of confidence in the niche digital asset even as the market shows signs of cooling.
The platform, first announced in October, will initially be available to a “small number” of people in the United States, a Coinbase spokesperson said. More users will be added from a waiting list over the next three to five weeks as the platform is tested.
Non-fungible tokens (NFTs) are a type of crypto asset that uses blockchain to record ownership of digital files such as an image, video, or piece of text.
They exploded in popularity in 2021, echoing the massive adoption of cryptos like bitcoin by mainstream investors and businesses. Some NFTs have brought in millions of cryptocurrency dollars, but growth has slowed in 2022.
On the popular OpenSea marketplace, sales of NFTs on the Ethereum blockchain halved to around $2.5 billion in March from $5 billion in January.
“We believe NFTs are here to stay,” a Coinbase spokesperson said. “Beyond buying and selling NFTs, our marketplace offers better ways to find the right communities and better spaces where they can feel connected to each other.”
NFTs are largely unregulated and reports of scams, counterfeits and market manipulation are common.
One marketplace, LooksRare, has generated billions of dollars in volume from a small number of wallets repeatedly trading NFTs with each other at inflated prices.
Another marketplace, Cent, halted trading in February because people were selling NFTs of content that didn’t belong to them.
Coinbase said it would allow reporting of copyrighted or fraudulent content. The ability to create (or “mind”) NFTs will be added to the Coinbase NFT platform in the future, the spokesperson said.