The hype has returned to the NFT market

The non-fungible token (NFT) market is recovering after a disappointing end of 2022. According to a new report from decentralized application (dApps) analysis platform DappRadar, there was a sharp increase in both prices and the number of NFT units sold on marketplaces at the beginning of the year, writes RBC Crypto.

In January, 9.2 million transactions were made, which is 37% more than in December. This was the highest market performance in the last six months. Dollar volume also rose to $946 million, up 38% from December and the highest since the market peaked at $1 billion in June last year.

It is important that DappRadar, when calculating, excludes the data of transactions that fall under suspicion of any manipulations. The most popular way is the so-called “wash trading”, when the owner makes fake NFT sales from his own wallets, artificially inflating its price or simulating the appearance of a stir for a little-known project.

“Blue Chips”

The Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) collections remain the market’s blue chips, with Yuga Labs behind them remaining one of the most recognizable brands in the industry. In January, the company’s new collection of NFTs called Sewer Pass, which serve as the keys to the blockchain game Dookey Dash, accounted for 34.3% of all market transactions in January. The badges were issued to owners of images from the BAYC and MAYC collections, and their daily turnover in the secondary market after the launch exceeded $27 million.

Other eminent collections also had high-profile newsbreaks in January. The creators of Doodles have acquired Emmy-nominated animation studio Golden Wolf, and the company behind the Moonbirds collection, PROOF, has signed a deal with Hollywood’s United Talent Agency to push the brand beyond Web 3.0 through traditional advertising and TV shows. The average image price of Doodles rose by 1.82% in January and Moonbirds by 3.43%, according to the NFT Price Floor.

Overall, the top 10 collections by market capitalization weathered the market downturn the best, and also posted the top 10 sales in January, according to a DappRadar report. They were also the first to recover from last year’s market crash, with Bitwise’s Blue-Chip NFT Collection Index showing a price increase of 28.6% compared to December. However, it is still almost 65% lower than in January 2021.

Main marketplaces

Collector-oriented marketplaces are gradually gaining market share from those whose focus is primarily on traders and speculators. Blur, which aims to minimize commissions for art creators, has a 20% market share for the third month in a row. In terms of turnover, the site is second only to OpenSea, the third and fourth places fall respectively on the X2Y2 and Magic Eden platforms.

PFP collections (NFT collections with profile images) remain the most successful in terms of sales on the sites, which is facilitated by their high liquidity and hype in social networks. OpenSea remains the largest platform in terms of trading volume, ($495 million in January). DappRadar estimates that the platform generated about $12.3 million in fees from trading and NFT offerings by their creators.

The Block drew attention to the fact that on the LinkedIn page (blocked in Russia) of eBay, which bought out the KnownOrigin marketplace last year, several vacancies appeared related to the field of cryptocurrencies and NFTs, including a community leader, content designer and advisor on cryptoassets .

Despite encouraging market performance, NFT platform Coinbase, the second largest crypto exchange, has announced that it is suspending listings of new collections. However, representatives of the company stressed that this does not mean the closure of its platform.

Coinbase’s NFT platform was not among the top six trading platforms analyzed by DappRadar, and its lifetime trading volume, according to Dune Analytics, is only $7.3 million, which is roughly equivalent to 7% of OpenSea’s January figures.

Market trends

DappRadar analysts note that in January, sales increased for all significant protocols: NFT sales on the Ethereum blockchain jumped from almost $558 million in December to over $772 million in January, and on Solana, from $69.5 million to $86 million, respectively. – a collection on the Solana blockchain called “DeGods” showed a 113% increase in trading volumes in January, despite the fact that at the end of December its authors announced plans to migrate to Polygon.

NFT sales volume on Polygon increased by 157% compared to December, reaching 4.5 million units. This was largely facilitated by the launch of Donald Trump’s NFT collection, which has generated $12.1 million in sales since launch, as well as the popularity of Mocaverse NFT passes from Animoca Labs and The Sandbox. The Polygon token (MATIC) also started 2023 successfully, having risen in price by 72% since January 1 to $1.23 according to CoinGecko at the time of publication.

Lending platforms that allow you to borrow crypto assets secured by NFTs are also showing growth. NFTfi reached record highs in January with a turnover of $300 million, 4,399 loans and 907 active borrowers and lenders. According to Dune Analytics, NFTfi and BendDAO together account for about 70% of the NFT lending market.

Despite the skepticism over the past six months, the NFT market is starting to revive, although its trading volumes in general obviously correlate with the rise in the price of bitcoin and other cryptocurrencies.


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