The sales volume of non-fungible tokens (NFTs) topped the $ 4 billion mark last month, according to TradingPlatforms.com and data released by DappRadar. Major markets for NFTs included OpenSea, Magic Eden, Axie Infinity, and CryptoPunks, with transactions on OpenSea alone accounting for over $ 3 billion in sales.
OpenSea, which is supported by Polygon (MATIC-USD), has seen its transaction volume increase by 20%. Other popular NFT marketplaces including Solanart, hosted on the Solana blockchain (SOL-USD), and NBA Top Shot recorded $ 53 million and $ 40 million in sales respectively over the past month. However, with the recent market downturn in light of the Fed’s hints of an interest rate hike earlier this year as well as flagship cryptocurrencies like bitcoin (BTC-USD) and ether (ETH- USD) dipping to multi-month lows, questions remain as to whether this growth in the NFT space will be sustained.
According to Mason Nystrom, senior research analyst at Messari, a cryptocurrency analysis firm that provides market insight to the industry, the NFT space may be better positioned than recent price movements suggest. cryptocurrencies.
“Cryptomarkets are quite correlated – the market tends to go up and down with Bitcoin,” Nystrom told Yahoo Finance. “This made it surprisingly interesting during the recent downturn as the NFT market continued to increase in volumes. OpenSea has recorded $ 2.3 billion in NFT volume so far in January, on the verge of breaking its monthly volume record if volumes continue. “
In addition to showing significant transaction flow, NFT prices also appear to be “showing strength” amid macroeconomic concerns and the crypto sell-off according to the January 11 Crypto Daily Report released by independent research firm Fundstrat. The report notes that over the past seven days, the floor prices of Bored Apes have increased 9%, while Doodles have increased by 47% and World of Women by 56% during the same period.
What’s the next step for NFTs?
Despite the volatility that may arise in the near term for NFTs due to current market conditions, Nystrom believes that the nature of these digital assets may lead to price decoupling within crypto markets.
“NFTs are a considerably broad category that can include music, art, collectibles, gaming assets, fantasy sports, financial assets, etc. As such, it is possible that the NFT trade in a specific vertical sector will grow while others decrease or fluctuate over time, ”he added. “Going forward, we may see a greater decoupling of crypto markets, with an asset like artistic NFTs capable of performing well in the midst of the overall crypto market, poorly, or vice versa.”
Regarding the major developments that investors can expect, Nystrom pointed out that the scaling of Ethereum Layer-2 and the growth of non-Ethereum Layer-1 blockchains were catalysts that would further expand the space. NFT. He also expects the growth and popularization of new applications of NFT technology as the booming industry continues to find ground.
“NFT games are likely to continue to receive significant funding, although it is possible that the valuations of some of these existing assets will fall to more reasonable levels,” he said. “The financialization of NFT – NFT loans, liquidity, insurance, etc. – will also increase as users seek to ensure that their NFTs can either produce a return or remain as liquid as possible. The last quarter of 2021 and the start of 2022 have already seen increased interest in different types of assets, including photography and NFT music. “
Thomas Hum is a writer at Yahoo Finance. Follow him on twitter @thomashumTV
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