According to a recent report by DappRadar, a survey of 81 Non-Fungible Token (NFT) collections on the Ethereum blockchain revealed a significant decline in market capitalization during 2022.
The report, released on February 9th, indicated that the market capitalization of Ethereum NFT went from $9.3 billion at the start of the year to $3.7 billion by the end of the year, resulting in a loss of 59.6%. It is important to note that the losses were not distributed evenly. The report also highlighted that the fluctuation in the price of Ether (ETH) had a direct impact on the valuations of NFTs:
“It is also important to consider that ETH lost 60% of its value last year, which had a strong influence on the value of the NFTs.”
According to the report, the Non-Fungible Token (NFT) market reached its peak in February 2022, with a market capitalization of $19.1 billion. This market outperformed Bitcoin (BTC) and Ether until the Terra incident in May. However, by the following month, NFTs had experienced a substantial decline, losing 88% of their value. The market hit its lowest point for the year at the end of November, with a market capitalization of $2.2 billion, following the FTX collapse. Despite this, the market finished the year with a 68% increase from its low point. The report highlights this information.
“This retraction of the NFT market was not a reflection of NFT’s utility, but rather a result of bad actors and market manipulations.”
According to the report, Yuga Labs dominated the Non-Fungible Token (NFT) market in 2022, accounting for two-thirds of the market. The CryptoPunks and Bored Ape Yacht Club collections from Yuga Labs held 46.7% of the market capitalization on their own. Meanwhile, the Otherdeed collection from Yuga Labs was the loss leader, experiencing a decline of 86.15%.
The report also highlighted that the Azuki, Pudgy Penguins, and Degen Toonz collections were the only ones launched in 2021 or early 2022 that saw significant growth in market capitalization, with increases of 113.89%, 260%, and 204% respectively.
NFT collections launched after the Terra collapse performed better, with notable examples including Potatoz (+134.68%), Renga (+211.63%), DigiDaigaku (+209.88%), and God Hates NFTees (+1,653.28%).
The report also noted a decline in the share of collectibles in the NFT market. Collectibles started 2022 with over 90% of the market, but by January 2023, they held less than 75% of the market. The report states that the trading volume for NFTs in January 2023 was $870 million.
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