Art, Blue-chip NFTs are driving Q2 NFT market growth

Consumers continue to show interest in NFTs in the face of troubled markets, with art and blue-chip collections among the best sectors in the market, a new report from Nansen shows.

The blockchain analytics platform’s quarterly report on the state of NFTs (non-fungible tokens) analyzes Nansen’s six NFT indices: Nansen NFT-500, Nansen Blue Chip-10, Nansen Social-100, Nansen Gaming-50, Nansen Art-20 and Nansen Metaverse-20. The indices are weighted by market value and denominated in ether (ETH).

Nansen’s NFT-500 index, which collects the performance of the leading 500 NFT collections on Ethereum, was up 49.9% compared to the year as of 31 March. However, the index gave up most of these gains in the second quarter, with an 8.5% year-to-date change at the end of the quarter.

All NFT sectors registered a setback in the form of ETH-denominated sales in June, with the exception of gaming NFTs, which are down more than 59% so far this year.

Blue-chips led the upward movement of the larger NFT market in early June – the top 10 collections reported a 23.6% increase in market value at the end of the quarter and a 17.9% increase in June alone.

Yuga Labs ‘Meebits regained its place in Nansen’s Blue Chip-10 index, and Art Blocks’ Chromie Squiggle also topped the charts, replacing the NFT Worlds and World of Women collections.

There is little evidence to support a continued upward trend due to limited liquidity, the report suggests – the inflow of blue chips still marks the “risk off” sentiment from NFT market participants.

However, an analysis of NFT buyers on Ethereum shows a strong increase in returning buyers in June and a small increase for first-time buyers.

The number of active buyers indicates continued growth in the market and the development of NFTs as a sector, according to Nansen.

Recent free coin events, such as GoblinTown and Moonrunners, could be a possible explanation for the rise in buyers, the report suggested.

Nansen analysts also found that art NFTs showed the largest increase in the month, with an increase of 33.1%. This sector encapsulates physical and digital art, plus generative art NFTs, which accounted for 92% of the market value of the Art-20 index.

In addition to consistent transaction volume and significant purchases for Chromie Squiggle, an NFT art collection that performed consistently in Q2, The Currency by Damien Hirst, was a collection of 10,000 NFTs, each equivalent to a physical work of art.

While the Art-20 index saw a decline in volatility, the Blue Chip-10, Social-100, Game-50 and Metaverse-20 indices showed an increase in volatility, in line with the broad market. The metaverse NFT sector is still the most volatile, a conclusion Nansen also reported in its previous quarterly analysis.

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