Here’s how the Nft market fared so far in 2023
During the first two months of 2023, NFT sales began to see a comeback. In January, the value of NFT sales reached almost $1 billion according to cryptoslam.io, increasing by over 40 percent compared to December 2022.
Non-fungible tokens (NFTs) burst onto the scene in 2017 with the introduction of CryptoKittes, but the market has come a long way since the breeding of digital tokens. Today, the term NFTs encompasses a variety of collections, including art, metaverse tokens, and gaming collectibles, among others.
As the concept gained traction, demand for digital assets increased significantly, and by 2021, NFTs were seen as one of the most important sectors of the crypto industry. The market value of NFTs even exceeded $40 billion in the same year.
However, a weak crypto market in 2022 hurt demand for NFTs, causing prices to fall by the second half of the year. To make matters worse, sales appeared to dry up, leading to a mass exodus of buyers and sellers from the market.
Nevertheless, a lackluster market did not deter several high-profile brands and businesses, including Starbucks, Louis Vuitton and Disney, from venturing into the NFT market. Meanwhile, celebrities like Snoop Dogg and Paris Hilton made news after launching their own NFT collections.
Despite such developments, the overall NFT market performance remained subdued last year. But has the situation changed in 2023 now that the cryptocurrency market is showing signs of a broader recovery?
The current NFT market scenario
During the first two months of 2023, NFT sales began to see a comeback. In January, the value of NFT sales touched nearly $1 billion according to cryptoslam.io, increasing by over 40 percent compared to December 2022. The next month, NFT sales reached nearly $2 billion. A DappRadar report mentioned that trading volume rose to $4.7 billion in the first quarter of 2023, a 137 percent increase from the previous quarter.
In addition, Q1 2023 had a total of 19.4 million NFT sales, up 8.5 percent from the last quarter of 2022. Ethereum remained the leading blockchain in the NFT market by volume, accounting for nearly 90 percent of the market share in March. The Solana blockchain came in second, followed by Polygon.
Separately, CryptoPunks was the most traded NFT collection on Ethereum. The trading volume of CryptoPunks reached $241 million in March, an increase of 1,214 percent from the previous month.
However, monthly trading volumes fell 15.6 percent in March to $1.7 billion. During the month, sales also fell by 4.63 per cent to 2.7 million. Notably, March is the only month during the first quarter where Bitcoin’s price remained flat.
However, while Bitcoin’s price made some progress in April, growth in the NFT market remained muted during the month. Over the past 30 days, NFT trading volume has fallen by 37 percent to $1.28 billion from $2.08 billion.
Furthermore, the latest report from NFTGo shows that on 26 April there were 8,641 sellers and 7,907 buyers in the NFT market. This data is disturbing since a greater number of sellers indicates that there is more supply than demand. This phenomenon can lead to more NFT owners lowering their prices, resulting in a decrease in the overall value of the space.
Despite headwinds and weak figures in March, DappRadar gave a positive reflection of the NFT market’s development in Q1. The report said “Overall, 2023 has started on a very bullish note for the NFT market”. It also mentioned that Ethereum’s dominance and the growing popularity of Polygon were the main highlights in the space.
Conclusion
The NFT market is witnessing an improvement in 2023 so far, despite declining numbers in March and April. The recovery appears to be in line with gains made by Bitcoin and Ethereum since the beginning of the year. Needless to say, the broader crypto market will continue to have an effect on NFTs. It is currently unclear whether the weak data from March and April indicate a changing landscape or are just anomalies. The second quarter of 2023 will provide greater clarity about where NFTs will end up by the end of 2023.
