A survey of 81 nonfungible token (NFT) collections on the Ethereum blockchain showed a sharp overall loss in market capitalization in 2022, according to a report from DappRadar released Feb. 9. Losses were not evenly distributed, however.
The Ethereum NFT market was worth $9.3 billion at the beginning of 2022, according to DappRadar’s valuation, and that figure dropped to $3.7 billion by year-end — a loss of 59.6%. The price of Ether (ETH) impacted the valuations:
“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.”
The NFT market peaked in February 2022 at $19.1 billion, outperforming Bitcoin (BTC) and Ether until the Terra collapse in May. By the following month, NFTs had lost 88% of their value. The market hit its year low at $2.2 billion at the end of November, the month of the FTX collapse. The market finished the year up 68% from that low. The report notes:
“This retraction of the NFT market was not a reflection of NFT’s utility, but rather a result of bad actors and market manipulations.”
Yuga Labs accounted for two-thirds of the market in 2022, with its CryptoPunks and Bored Ape Yacht Club collections holding 46.7% of the market by themselves. The Otherdeed collection was Yuga Labs’ loss leader, falling 86.15%.
The Azuki, Pudgy Penguins and Degen Toonz collections were the only ones “launched in 2021 or early 2022 to experience significant market cap growth,” rising 113.89%, 260% and 204%, respectively.
NFT collections launched after the Terra collapse fared better. The report cites Potatoz (+134.68%), Renga (+211.63%), DigiDaigaku (+209.88%) and God Hates NFTees (+1,653.28%) as examples.
The report also traced the declining share of collectibles in the NFT market share. Collectibles started 2022 with over 90% of the market but held well below 75% of it in January 2023. Trading volume for NFTs in January 2023 amounted to $870 million.
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