The NFT market grows in January as major players launch new collections

The non-fungible token (NFT) market looks set to recover from a disappointing end to 2022, driven by the ease of macroeconomic tensions and launches by some of the industry’s biggest players, including Yuga Labs, Doodles and Moonbirds.

Dollar value and units sold increased in January, according to a new report from decentralized application analytics platform DappRadar. There were 9.2 million transactions in January, up 37% from December and the highest sales figure in six months.

Dollar trading volume also increased, reaching $946 million, up 38% and the most since peaking at $1 billion in June.

“You’re starting to see some momentum from the macro perspective and a pullback from things that were so oversold,” said Juan Leon, a research analyst at Bitwise Asset Management. Declining inflation and declining interest rate increases benefit risk assets across the board. . He adds that last year investors recognized “that everything that could have gone wrong in 2022 went wrong”.

Falling token prices and fears of contagion from FTX failures shrunk the market to $683 million in December from $1 billion in June.

Yuga Lab’s latest collection, Sewer Pass, which serves as keys to the company’s latest blockchain play, accounted for 34.3% of all NFT transactions for January.

“They were the driving factor behind trading volume in January,” adds Leon.

Doodle’s acquisition of an Emmy-nominated animation studio and Moonbirds’ contract with a Hollywood talent management company also built confidence in the market. Doodle’s average price rose 1.82% in January and Moonbird’s 3.43% in January, according to NFT Price Floor.

This year “could mark the red carpet entrance of NFTs into Hollywood,” says Leon.

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Marketplaces aimed at traders are gaining ground on those aimed at collectors. Blur, which tries to minimize marketplace and creator fees, accounted for 20% of the market for the third consecutive month.

Blur’s anticipated launch of a platform token that rewards traders for listing and trading on the service has also fueled usage.

But this model may not be sustainable. Continued use of platforms that reward their users with tokens has not resulted in long-term economic activity, Leon says, and also poses “the risk of NFTs being classified as securities,” he adds.

The best performing types of collections so far this year were profile picture collections, likely due to their liquidity – they don’t spend too much time on the market before other buyers pick them up. In fact, blue-chip collections weathered the market downturn the bestt, accounts for all of the top 10 NFT sales in January, according to the report. They have also been the first to bounce back from the market dive last year, the Bitwise Blue-Chip NFT Composite Index showing a 28.6% price increase from December. However, it is still down nearly 65% ​​as of January 2021.

OpenSea remains the largest NFT marketplace by trading volume, with $495 million in January. DappRadar estimated that the platform had approximately $12.3 million in revenue from platform and creator fees.

“OpenSea has been around the longest; people are used to it, so people feel comfortable with it,” says Leon.

Despite the encouraging industry numbers, one marketplace has decided to take a break from adding new NFT collections. Coin baseCOIN
NFT, which had an underwhelming start, announced that it would be putting new creators on its marketplace on hiatus to “focus on other features and tools requested by creators.” Nevertheless, the company claimed in a Twitterr post: “To be clear: We are not shutting down the Coinbase NFT marketplace.”

Coinbase NFT was not among the top six marketplaces analyzed by DappRadar, and according to Dune Analytics, its all-time volume is $7.3 million, just 7% of OpenSea’s January figure.

Ethereum-based NFTs remain the most popular. They held the top spot by trading volume in January, holding 36% of the market. PolygonMATIC
had the biggest growth since the end of last year, a 124% increase to $46 million in NFT trading volume.

Sales figures for Polygon NFTs increased by 157% from December, reaching 4.5 million units. This was largely driven by the launch of popular collections such as the Donald Trump NFTs, which accounted for $12.1 million in sales since launch, according to data from CryptoSlam, and NFTs that serve as metaverse passports for Animoca Labs’ Mocaverse and The Sandbox.

Polygon’s matic token also had a strong start to 2023, rising 72% to $1.24 since January 1st, at least partially reflecting NFT activity.