The NFT market has outpaced the cryptocurrency market, shows the NANSEN 2022 Quarterly NFT Report. Despite a fall in global markets across most asset classes at the end of Feb 2022, the NFT-500 rose 5.9 percent in March.
“The NFT market continues outperforming the cryptocurrency market year-to-date with a 49.9 percent year-to-date return when denominated in ETH,” says Louisa Choe, who wrote the report.
Despite the growth of NFTs, there are some events such as this one which suggest otherwise: Jack Dorsey’s first tweet’s NFT that was sold for $2.9 million in Dec 20200 didn’t get any bidder for more than $280 in a recently-concluded auction. One might argue that Dorsey’s first-tweet NFT has historical importance, but the $2.9 million price tag is almost impossible to rationalise.
NFT market outperforms the crypto market in FY ending March 2022.
|Asset||YTD (ending March 31, 2022 in %)|
|Crypto large cap||-2.7|
It is important to note that the volatility of these sectors varies, and according to the NANSEN research, Bluechip NFTs such as Azuki and CloneX are the least volatile.
Globally, there are now access and membership NFTs that allow access to certain events, products or services.
For instance, an entertainment company Mola organised an event on March 23 wherein participants were supposed to buy membership passes in the form of an NFT to gain entry.
The most volatile part of the NFT market include metaverse and art NFTs. The metaverse entails land NFTs, avatars and utility NFTs, and hence it is quite unfeasible to evaluate the price, for virtual land such as Decentraland or The Sandbox.
Market share of NFT categories in March
|Sub-category||Market share (%)|
|Access & membership||13.5|
The report shows that generative art is the most popular component of art NFTs in general and also that the majority of Metaverse and art market players are ‘speculators’.
The report gives empirical data to show that the gaming industry's overall growth is falling. With a drop of -24.4 percent, the Gaming-50 index has fallen the maximum out of all the NFT niches.
Notwithstanding the drop, the overall NFT market appears healthy in comparison to the crypto market. This is undoubtedly a fast-growing and dynamic area of the cryptocurrency industry and this is true for retail investors.