In the first four months of the year a total of 37 billion US dollars was raised NFT-Marketplaces sent, compared to $41 billion for all of 2021
Yuga Labs, creator of the bored Ape Yacht Club, leads with three of the top five projects by volume
The Otherside project in April is already the fifth largest project in history in terms of volume
NFTs are on track for $111 billion in volume this year
As the cryptocurrency market is rocked by this week’s carnage (looking at you, Terra), Cointext thought it wise to take a step back and assess how far it’s come.
Perhaps no sector has progressed as much as NFTs. As of May 1st, $37 billion has been sent to NFT marketplaces so far this year. It’s already on the verge of surpassing 2021’s total, which landed at $41 billion, according to a recent study by Chainalysis.
Extrapolating this forward points to a projected NFT volume of $111 billion in 2022. However, the future of this relatively new industry is still unclear and far from predictable – not to mention the fallout from this week’s market turmoil that could impact future volume.
The past week has not been easy for the NFT market, which can be clearly seen with Yuga NFTs posting a massive 31 percent drop during the market capitalization industry has taken a serious hit, falling to $19.5 billion.
This is what awaits you in this article
NFT Marketplace Coinbase disappointed
Chainalysis’ report on the NFT market comes just days after the launch of the NFT– Coinbase marketplace. So far, however, activity on the Coinbase marketplace has been extremely disappointing. On the first day of trading, only 150 transactions with a total volume of around USD 75,000 took place on the Coinbase platform. These aren’t good results for a billion-dollar company like Coinbase, although they’ll likely be working hard to push the market forward.
All in all, the NFT market remains a special phenomenon. Few expected it to grow into a multi-billion dollar business, but we have now reached that point. But that says nothing about the sustainability of the market. Only time will tell if interest in NFTs remains at this level.
Looking at the market from a seven-day perspective, most collections have lost more than 50 percent of their value. Aside from the Yuga NFTs housed on Ethereum, more than eight blockchains occupying the top 10 positions have suffered massive losses.
The number of new wallets making purchases has also dropped sharply since this month. However, these moves have not caused the analysts to reverse their predictions about the digital art market.
Big spikes in value broadcast so far this year have occurred in February – when OpenSea finally saw significant competition in the form of LooksRare – and also in April, due to the Otherside coin being owned by Yuga Labs, the founders of the Bored Ape Yacht Club, was introduced.
Bored Ape Yacht Club
It’s only been a year since the Bored Ape Yacht Club launched but they are available with a reserve price of 99 ETH (still $210,000 even after the recent downturn) has become the flagship collection.
If you look at the all-time ranking list on OpenSea, the dominance of BAYC becomes clear. While CryptoPunks is still number one in terms of all-time volume, BAYC founder Yuga Labs owns the IP rights to this collection.
In addition, three of Yuga’s top five projects have started. Mutant Ape Yacht Club and the previously mentioned Otherside Mint, which released just last week, show a volume of 250,000 ETH and 390,000 ETH, respectively.
The Otherside project is particularly intriguing as it is an attempt by Yuga Labs to start their own metaverse, with collectors striving to buy “deeds” in order to “land” in the virtual world.
The allure of this project can be seen in two other ways aside from the amazing volume shown in the image above. The first is the gas war that played out on Ethereum during the mint, with transaction fees rising to an unbelievable four-digit figure. Second, ApeCoin’s price action required to buy the NFTs told a story – it was bid all the way up and then crashed 50 percent after minting.
The chart below from Kaiko shows that funding rates for ApeCoin also turned negative shortly after the announcement that NFT investors would need the coin to participate. This suggests that traders were shorting the coin and expecting it to fall following the announcement. Of course, as also indicated by the orange price line, this turned out to be a very prescient move (despite a brief rebound thanks to a tweet from Elon Musk).
As discussed above, extrapolating the NFT volume of $37 billion for the first four months of the year results in a forecast of $111 billion for the year. Whether a direct extrapolation makes sense in view of the stock market crash of the last few days is of course another matter.
For comparison, the entire crypto market had a trading volume of $14 trillion in 2021, where Bitcoin was responsible for $9.5 trillion of that number. That means the rest of the market added up to $4.5 trillion.
Therefore, if NFTs hit $111 billion this year, that means they would still account for a relatively small 2.5 percent share of non-bitcoin-related trading volume. So maybe there really is more room for growth for NFTs, especially given the extremely short time they’ve been in existence.
Source: Crypto News Deutsch