On Tuesday, blockchain data analytics platform Nansen published its quarterly report on the state of non-fungible tokens, or NFTs. The report highlighted the rapid growth of the NFT market over that of the cryptocurrency market so far this year, predicting a market capitalization of $80 million by 2025.
As Cointelegraph previously reported, Nansen recently published six Ether (ETH) denominated market capitalization-weighted NFT indices: Nansen NFT-500, Nansen Blue Chip-10, Nansen Social-100, Nansen Gaming-50, Nansen Art-20, and Nansen Metaverse-20. .
According to Nansen’s 2022 quarterly report on NFTs, the NFT market continues to outperform the cryptocurrency market year-to-date, returning 103.7% when denominated in ETH and 82.1% when denominated in USD. Despite global markets falling across most asset classes at the end of February 2022, the last 30 days saw a 5.9% rise in the NFT-500 in March.
Louise Choe, Nansen research analyst, stated that NFTs “have proven to resonate with retail investors over the past year,” especially in the first quarter of 2022, adding that only time will tell which sectors become the driving force in the market as more artists, creators and builders innovate.
The volatility of each of these sectors can be different, and the Nansen report revealed that “blue chip” NFTs, which are ranked by market capitalization, are the least volatile. The collections that top the OpenSea charts, such as Azuki, Clone X and Doodles, have been classified as “blue chip”. This is probably because they have been made known within the cryptocurrency community and can be considered good long-term investments due to their track record of growth and value.
On the other hand, the report finds art and metaverse NFTs to be the most volatile segment of the NFT market. Nansen classifies land and real estate, avatar, and utility NFTs in the metaverse segment. Evaluating the prices, especially of the virtual lands in Decentralandia or The Sandbox, can be a challenge.
When it comes to art NFTs, the subjective nature of value perception, as well as the relatively illiquid nature of art, are also contributing factors to its volatility. Nansen illustrated that generative art is the most popular segment of art NFTs in general, stating that most metaverse and art market participants tend to behave like “speculators”.
Nansen’s indices also point to a decline in global growth within the gaming ecosystem. The Gaming-50 Index saw the largest performance drop so far this year compared to other NFT sectors, with Play-to-Earn, or P2E, NFTs and Role Playing Game, or RPG, NFTs experiencing most of the descent. Traditional gamers have been reluctant to adopt NFTs and are not afraid to express their opinion, as in the cases of Good Luck Games, Ubisoft or GameStop.
Recently, Nansen published another report on the popular game Axie Infinity (AXS), citing the more than 2.8 million unique addresses currently owned by 11.1 million Axies. However, after losing $625 million to a hack that affected the underlying blockchain of Axie’s “play-to-earn” gaming platform, the Ronin Network, the AXS token price has entered a downward trend. .
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