NFT: A digital asset known as an NFT signifies ownership of a unique object or item.
It could be a tweet, a work of art, a collectible, a video game item, etc.
A blockchain, a decentralized and secure digital ledger, is where NFTs are stored.
Their capacity to prove ownership and authenticity of digital things has attracted much interest in recent years.
2021 popularity
NFTs saw a rise in popularity in 2021, especially in the art industry.
Digital artworks have been sold using NFTs for high prices; some artists have made millions from the sale of their NFTs.
The convenience with which NFTs may prove a digital item’s ownership and authenticity is one of the factors contributing to their appeal.
Since digital artworks can be copied and shared online, the art world finds this particularly enticing.
Another factor contributing to NFTs’ appeal is the ease with which people can buy and sell them, thanks to online markets.
2022 market
The NFT and cryptocurrency sectors experienced months of falling sales last year.
Despite a sharp decline in cryptocurrency values, the entire NFT sales volume nearly reached its peak in 2021.
Data from DappRadar indicates that a positive start to the market in 2022 contributed to the final tally, offsetting the subsequent months of weakness.
Over $24.7 billion in organic trading volume was created last year on blockchain platforms and marketplaces.
Even so, it represented a minor decline from the $25.1 billion total in 2021, when the industry surged and tokenized collectibles started to gain specialized interest.
Wash trading
The information DappRadar provided omits suspicious trades, particularly those resulting from wash trading.
Wash trading is the practice of traders selling their NFTs at inflated prices back and forth within their controlled wallets.
Trading typically takes place to benefit from a token rewards mechanism on marketplaces.
The figures didn’t include wash trade worth billions of dollars from sites like LooksRare and X2Y2.
Both markets provide virtual incentives for trading.
Trading volume
Although trading volume was static throughout the year, DappRadar saw an increase in the number of NFTs exchanged.
In 2022, the firm recorded over 101 million trades, up from 58.6 million in 2021.
However, because of the unstable cryptocurrency and NFT pricing, NFTs were traded at lower USD values.
Read also: Coinbase stock price jumps after settlement
Falling value
The value of the cryptocurrency market decreased significantly in 2022.
Following the breakdown of Terra’s LUNA and UST in May, the losses were severe.
The collapse of FTX, which had a ripple effect on cryptocurrency values, worsened the crypto winter.
In 2022, the NFT market took a similar trajectory.
Due to the momentum from 2021 continuing into the new year, sales were strong in January.
OpenSea reported a $5 billion trading volume record.
The following months saw a decrease in trading volume, however.
The debut of Yuga Labs’ Otherside stabilized the market in April, which helped OpenSea set a single-day trading volume record.
By that point, the 2022 sales volume appeared to surpass the 2021 total.
May collapse
The spike in sales only lasted briefly as crypto prices took a steep fall in May.
As a result, NFT trading prices fell sharply, losing their momentum.
In May, monthly volume declined from almost $3.3 billion to over $1 billion in June.
Since then, the market has been unable to reach the same heights as the $1 billion mark.
Leading NFT
The Bored Ape Yacht Club was the most popular NFT project in 2022.
It produced trade volume reaching close to $1.6 billion.
However, the bulk of the trading took place from January to May.
Due to this, starting prices decreased from a peak of $429,000 worth of ETH in late April to the more recent $60,000 in November.
Closing market
The NFT market began 2022 with a bang but ended the year in a hush.
In November, trading improved marginally, while NFTs sold in December recovered from a decline.
DappRadar estimates that the market generated roughly $684 million in organic trades in December, up from an adjusted total of $662 million in November.
That month saw the sale of more than 6.7 million NFTs, up from 4.8 million in November and 6.1 million in October.
With approximately $297 million in organic NFT trades in December, OpenSea remained the market leader.
Blur, a new rival encouraging trading with the promise of token incentives, saw a surge in December from $115 million to $177 million.
Solana continued its patchy performance, decreasing from November’s $95 million to $70 million.
After almost generating $134 million in NFT sales, it decreased in October.
In addition, after the FTX crash, SOL values decreased in November and December.
Reference:
NFT sales in 2022 nearly matched the 2021 boom, despite market crash
