NFTs existed before 2021, but in the past year digital art has proliferated in the blockchain space, and digital artists have shone in the NFT spotlight. While the crypto world has become an exciting place to be, a new generation of NFT artists have entered the world’s largest art movement to date.
Cryptocurrency investors are facing a tough time in January 2022 as the price of Bitcoin (BTC) and other cryptocurrencies continues to fluctuate wildly. Some have blamed the drop on the Federal Reserve’s recent announcement of additional interest rate hikes, as well as political turmoil in Kazakhstan, which drastically lowered the bitcoin hash rate. Bitcoin price dropped below $42,000 on January 14 as traders were hoping for bullish signs.
It seems that while the cryptocurrency market continues to suffer, the NFT space is seeing an incredible rise in trading volumes and interest.
NFT & GameFi in a beautiful month
A new report shows that NFT and GameFi transactions have continued to rise despite crypto prices falling. The Dappradar report notes that “the number of UAW connected to Ethereum NFT DApps has grown by 43% since the third quarter of 2021,” according to the research. Funds generated from NFT trading increased from $10.7 billion in the third quarter of 2021 to $11.9 billion in the first 10 days of 2022, according to research. This rise can also be attributed to recent developments in the field of NFT, such as the creation of the LooksRare Market.
According to the report, “Blockchain games continue to be widely used,” noting that they “account for 52% of industry use.” The case for the continued development of blockchain games through 2022 is boosted by the expansion of metaverse technologies and the growing success of the play-for-profit model.
Data from Dune Analytics revealed that OpenSea, the leading market for NFT, generated nearly $2.7 billion in volume in the first half of January, on track to beat the high of $3.4 billion in August.
OpenSea recorded the highest single-day trading volume of $261 million on January 9. So far in January, OpenSea has crossed $150 million in trade volume on a daily basis.
OpenSea daily volume on Ethereum. Source: Dune Analytics
Related article | OpenSea transaction volume shows NFTs are not slowing down
Mason Nystrom, chief research analyst at Messari, believes that the NFT market is in a better position than the recent cryptocurrency price movements suggest.
Nystrom notes that:
“Crypto markets are somewhat interconnected – the market tends to go up and down with Bitcoin. This made surprisingly interesting during the last downturn as the NFT market continued to increase in volumes. OpenSea recorded $2.3 billion in NFT volume in January so far, in A way to break the monthly volume record if volumes continue.”
The market reflects the growing interest
During this market downturn, Chinese consumers have shown an increased interest in NFTs and blockchain games, which aligns with recent Chinese announcements that the government will start building its own non-crypto NFT. According to DappRadar research, “China is now the country with the largest user base… 166 percent more than the numbers recorded in November.”
Crypto Market Cap Stands at $2 trillion. Source: TradingView
Despite the near-term volatility that NFTs may experience as a result of current market conditions, the nature of these digital assets may lead to a price decoupling within the crypto markets.
Despite the fact that the United States currently ranks second in terms of total traffic, the country has added 175,000 new members to the NFT ecosystem, which is a 38 percent increase. This is partly due to an increase in interest among younger audiences, with millennials and Generation Z beginning to get a larger share of traffic.
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Featured Image from Unsplash | Charts by Dune Analytics, and TradingView