While ether is up around 70 per cent YTD, non-fungible token valuations are not following
Crypto is moving toward bull-market territory, but NFTs have failed to benefit from the market euphoria.
While ether is up around 70 per cent YTD, non-fungible token valuations are not following. Nansen’s NFT-500 index, which measures the valuation of the top 500 NFTs, has declined 50 per cent YTD when denominated in ETH and 16 per cent in dollar terms.
The Blue-Chip 10 index, which measures the valuations of the most prominent non-fungible tokens, like CryptoPunks and the Bored Ape Yacht Club, is 44 per cent lower in ETH terms, 1.7 per cent in dollars.
OpenSea, the biggest non-fungible token marketplace, has not fared much better. At the height of NFT mania in January last year, the platform was clearing $387.48 million in fees every month and $120.45 million in revenue, as per data from DeFiLlama. Now, fees have plunged to $6 million a month and revenue to $1.39 million.
NFTs have survived their first market cycle and have yet to take on a new jumping point in technology to usher in more user interest, like DeFi had with Uniswap’s AMM, stated Nick Ruck, the COO of ContentFi. Many new innovations are still being built to increase the use cases of non-fungible tokens, but it is also partly because of the fact that NFT prices are generally negatively correlated with the dollar price of ether.
There are some signs of growth in the market, however, including a growing market of non-fungible tokens based on utility instead of monkey JPEGs, applying the technology to things such as ticketing and loyalty programs.
Bitcoin ordinals also continue to grow in popularity, with miners raising the fees. Sora Ventures’ Jason Fang attributed their success to them being a hub for the growing development of something similar to a layer-2 for the Bitcoin blockchain.
