DappRadar reports show over 59% loss in Ethereum NFT Market Cap
All sectors of the crypto and NFT industry were heavily impacted by the bear market of 2022. Many crypto assets, including Bitcoin, fell fell drastically within that period, reflecting the negative effect of the bearish trend. Cryptocurrencies also saw low trading volume and market capitalization, affecting the global industry frontier.
So it is not surprising to detect a ripple effect in the NFT market, as suggested in a new DappRadar Report. According to DappRadar, the Ethereum NFT market capitalization fell in 2022. This report is not surprising, given that the market has not recovered from the crypto winter.
Terra and FTX implosions caused NFT value to drop, says DappRadar
In detail DappRadar Report noted that the Ethereum NFT market capitalization recorded a decline of 59.60% early this year. The market cap of 81 Ethereum NFT collections went from $9.3 billion at the start of 2022 to approximately $3.7 billion at the end of 2022.
DappRadar cited May 2022 Terra Luna implosion as the primary cause of massive loss in market value as of June 2022. According to the explanation, the decline in market value of non-fungible tokens was not due to a lack of investor interest, but due to manipulations by bad players in the crypto space. It may also be the most likely cause of the woes of the broader crypto industry, which escalated with the FTX crisis at the end of 2022.
Around the time of the FTX collapse, the entire non-fungible token space experienced a major blow after the global crypto market took a hit. The chart below shows the performance of the NFT market against BTC, ETH and SPX from January to December 2022.
Following the chart, there was a sharp decline in the NFT market from May down to December 2022, which also represents the period when the Terra collapse occurred.
Outlook for the NFT market in 2023
DappRadar’s report also noted that a few NFT projects launched between 2021 and early 2022 experienced up to 260% growth in market capitalization. Some of these projects include the collections Azuki, Pudgy Penguins and Degen Toonz, whose market value increased by 113.89%, 260% and 204% respectively.
More recent NFT projects that started after the Terra Luna collapse include Potatoz, Renga, God Hates, and DigiDaigaku. Potatox’s market value grew by 143.68%, God Hates NFT by 1,653.28%, Renga by 211.63% and DigiDaigaku with a growth of 209.88%. These NFT collections observed an impressive increase even though Ethereum NFTs saw a price drop of almost 60% in the last year due to the market downturn.
But while other Ethereum NFTs declined, Bored Ape Yacht Clube collections dominated the market. The DappRadar report also suggests that Yuga Lab’s Bored Ape Yacht Club (BAYC) NFT project dominated the Ethereum NFT market, becoming the leader in the NFT space.
BAYC collections accounted for up to 67% of the total non-fungible tokens market volume on Ethereum. But even though Yuga Labs BAYC dominated the Ethereum market, its capitalization recorded a 64.92% decline from $2.6 billion in early 2022 to $934 million by the end of 2022. But despite this decline, Yuga Labs still bought the two largest NFT collections in crypto market; CryptoPunks and Meebits.
Feature image from Pixabay, chart from TradingView
