Coinbase will be making NFTs available on its crypto marketplace, marking a bid to expand its reach in the "creator economy," the company said Tuesday.
Coinbase said users will be able to mint, showcase and buy NFTs, which are unique digital records of photos, videos, audio files and artworks. NFTs are a fast-growing segment of the crypto industry, with sales volume soaring to $2.5 billion in the first half of 2021, up from $13.7 million in the year-ago period.
Coinbase, one of the biggest crypto marketplaces in the world, said it hopes to make NFTs more accessible by "building intuitive interfaces that put the complexity behind the scenes."
"The excitement surrounding NFTs is high," the company said in a statement. "But if you've tried to create or purchase an NFT, you've probably found the user experience lacking. … Creating an NFT should be as simple as tapping a few buttons. Anything more complicated is a barrier to unleashing your creativity."
Coinbase cited the broad appeal and market potential of NFTs as the motivation behind its new service, which recently led Visa to purchase CryptoPunk #7610 and led DJ Justin Blau to roll out a new business model for musicians. The company said users can join a waitlist for early access to its NFT service.
"Artists have used NFTs to shake-up the traditional art world," the company said in its statement. "Industries such as fashion, gaming, and music have begun to recognize the power of NFTs to unlock new types of creativity and ownership."
Wedbush analyst Dan Ives, who covers Coinbase, said the move will likely strengthen its position in a growing market. The new offering is "another notch on the belt for Coinbase and further paves the path for crypto around this NFT demand explosion," he told Protocol.
Rob Siegel, a management lecturer at Stanford's Graduate School of Business, said Coinbase is entering a space that clearly has strong momentum. But he argued that the future of NFTs is still up in the air.
"But I have to wonder at what point people will want to value something that someone has 'blessed' as the original item of something that can be replicated exactly," he told Protocol. "So, as long as someone is willing to pay for NFTs — fine. But there is no inherent value in them. But VCs and the media sure like talking about this."