Blue Chip and Metaverse NFTs propel growth of NFT Market, says Nansen report
Blue Chip NFT collections such as Azuki, Clone X and Doodles are leading the growth of the steady growth of a market that has traded over $17 billion.
On Tuesday, blockchain data analytics platform Nansen released its quarterly report on the state of nonfungible tokens, or NFTs. The report highlighted the rapid growth of the NFT market over that of the cryptocurrency market year-to-date, and it predicts of an $80 million market cap by 2025.
As Cointelegraph previously reported, Nansen recently released six NFT indexes weighted by market capitalization denominated in Ether (ETH): Nansen NFT-500, Nansen Blue Chip-10, Nansen Social-100, Nansen Gaming-50, Nansen Art-20 and Nansen Metaverse-20.
According to the Nansen 2022 Quarterly NFT Report, The NFT market continues outperforming the cryptocurrency market year-to-date, putting in a 103.7% return when denominated in ETH and 82.1% when denominated in USD. Despite a downturn in the global markets across most asset classes at the end of February 2022, the last 30 days saw an 5.9% increase in the NFT-500 in March.
Louisa Choe, research analyst at Nansen, stated that NFTs have “proven to resonate with retail investors over the past year” especially in Q1 of 2022, and added that only time will tell which sectors become the market’s driving force as more and more artists, creators and builders innovate.
The volatility of each of these sectors may differ, and the Nansen report revealed that Blue Chip NFTs, which are categorized by market capitalization, are the least volatile. OpenSea chart topping collections like Azuki, Clone X, and Doodles have been categorized as Blue Chip. This is likely because they have become well-known within the crypto community and can be considered good long-term investments due to their track record of growth and value.
Related: OpenSea monthly volumes top $5B as NFTs continue to mainstream
On the other hand, the report considered Metaverse and Art NFTs to be most volatile segment of the NFT market. Nansen categorizes land and real-estate NFTs, avatar and utility NFTs under the Metaverse segment. Evaluating the prices, especially of virtual of land in Decentraland or The Sandbox, can be challenging.
When it comes art NFTs, the subjective nature of value perception as well as art’s relatively illiquid nature are also contributing factors to its volatility. Nansen illustrated that generative art is the most popular segment of art NFTs overall, and stated that most metaverse and art market participants tend to behave as “speculators.”
The Nansen indeces also point to a decrease in overall growth within the gaming ecosystem. The Gaming-50 index saw the biggest drop in performance year-to-date when compared to other NFT sectors, with Play-to-Earn, or P2E, NFTs and Role Playing Game, or RPG, NFTs seeing the majority of the decline. Traditional gamers have been hesitant to embrace NFTs and aren’t afraid to voice their opinions like in the cases of Good Luck Games, Ubisoft or GameStop.
Recently, Nansen published another report on the popular play-to-earn game Axie Infinity (AXS), citing the over 2.8 million unique addresses that are currently holding 11.1 million Axies. However, after losing $625 million to a hacking incident involving Axie’s play-to-earn gaming platform’s underlying blockchain, the Ronin Network, the price of AXS keeps falling.
Powered by WPeMatico