Ethereum’s NFT market cap lost $5.6 billion in 2022

The NFT (Non-Fungible Token) market has emerged as one of crypto’s fastest-growing sectors of the broader industry in recent years. However, the Ethereum NFT market, which accounts for over 70% of the sector, lost by 59.60% in 2022, no thanks to unfavorable macroeconomic conditions/policies.

The market that started the year 2022 with a value of $9.3 billion ended the year at a value of $3.7 billion, according to data from DappRadar, which used machine learning algorithms to generate these numbers.

The popularity of NFTs increased in 2021, with a few high-profile sales generating significant buzz and driving up prices. For example, in March 2021, an NFT representing an artwork by digital artist Beeple sold for a record $69 million at a Christie’s auction. Other notable sales include Jack Dorsey’s first tweet selling for $2.9 million, a video clip of LeBron James dunking for $208,000, and a digital house for $500,000.

The Ethereum NFT market cap, according to DappRadar, consists of 81 collections. Yuga Labs has established itself as a leading player in the NFT industry. However, most collections experienced depreciation towards the end of 2022, with Otherdeeds, for example, experiencing the largest decline of 86.15% in market value.

What you should know: The market for the 81 Ethereum collections experienced a tough year in 2022. Yuga Labs’ market cap for NFT collections represents 67% of the entire market cap. However, it is also important to consider that ETH, the original token of the Ethereum blockchain, lost 60% of its value last year, which had a strong influence on the value of the NFTs.

• Furthermore, this withdrawal of the NFT market was not a reflection of NFT’s utility, but rather a result of bad actors and market manipulation. Despite this, many promising projects emerged from the bear market, showcasing the potential of unique digital assets.
• While the first half of 2022 saw a boom in NFTs and hype surrounding the unique digital assets, this growth was in stark contrast to the performance of other traditional assets such as ether and bitcoin, which all saw a downward trend. The NFT market yielded higher returns for investors, with the market capitalization reaching its peak value of $19.1 billion in February 2022.
• However, this growth was not sustainable and the May 2022 Terra Luna collapse had a devastating impact on the NFT market, leading to an 88% decline in value by June. The Terra Luna event also had a significant impact on the performance of the entire cryptocurrency market as the market lost its trillion-dollar status at the time.
• The FTX collapse in November further exacerbated the downward trend, with the market capitalization hitting a low of $2.2 billion at the end of that month.

Conclusion: Although 2022 was a challenging year for The NFT market and the dapp industry as a whole, some NFT pools still managed to thrive and appreciate in market value.

So far in 2023, the NFT market has shown positive signs, especially considering the positive calculations on the chain seen in January of the new year so far.