NFTs are avoiding the crypto crash
A number of recent macroeconomic events have affected all markets, not just cryptocurrencies. These include mining problems in Kazakhstan, yet another Covid outbreak, the Federal Reserve making noises about an interest rate rise, and finally the fears about what is going to happen with Russia and Ukraine. These events have contributed to the total crypto market cap shrinking from $2.9T to $1.6T.
However, whilst ‘fear’ is the overall market sentiment, the data related to NFTs looks quite different. DappRadar says, “While a group of events has hampered the crypto market, a series of factors have positively impacted the outlook of NFTs at a macroeconomic level.”
One of the key reasons for the growth in NFTs is the number of big brands, including the luxury brands, getting on board. Celebrities, such as comedian/actor Kevin Hart and footballer Neymar, have publicly announced their recent entries into the Bored Ape Yacht Club (BAYC), one of the leading NFT projects.
And Twitter, the platform most favoured by crypto and NFT enthusiasts, has also “enabled its first web3 functionality inside the social platform,” with the other platforms expected to follow suit. Even Walmart has filed several trademarks for NFT use.
Furthermore, for the first time ever, Google saw searches for ‘NFTs’ outperform searches for ‘crypto’. And Asia is joining the North American and European craze for non-fungible tokens.
According to DappRadar: “NFTs singlehandedly produced one of the most impressive metrics we saw in the blockchain industry last year. In total, $25B was generated by this type of asset in 2021 alone. That’s a whopping 18,414% more than the four previous years combined.”
The Ethereum blockchain
What is interesting to note is that whilst the price of ETH to USD has declined, NFTs on the Ethereum blockchain are rising. So, too, have the Unique Active Wallets (UAW) connected to NFT dapps (collectibles and marketplaces). DappRadar adds, “Furthermore, as the value of the underlying assets supporting NFTs is on the downside, individuals might see the negative cryptocurrency trend as a buying opportunity.”
And there is one more important metric to note: “The recent floor price analysis for some essential Ethereum collections signals that NFTs behave like assets that store value. A class of assets outperforms important cryptos and even traditional assets like gold or the S&P 500 Index.”
To read the full DappRadar report, go to The Defiant — one of the top DeFi news publications.