The WSJ article claiming that the non-fungible token (NFT) market is “collapsing” doesn’t tell the whole story, since contrary data shows that the market is consolidating.
In the same week when the top five collections alone accounted for more than $1 billion in primary and secondary sales, a Wall Street Journal story claimed that sales of non-fungible tokens (NFTs) are “flatlining.”
According to data from Nonfungible, an NFT market analysis platform, the number of NFT sales has plummeted by 92 percent since an all-time high in September 2021. Since a high in November 2021, wallets engaged in the Ethereum (ETH) NFT market are claimed to have dropped by 88 percent. The publication concluded, “The NFT market is collapsing.”
Onchain data from Dune Analytics’ dashboard, on the other hand, suggests that the NFT market is still thriving, with statistics indicating that NFT users and transactions are substantially higher than Nonfungible claims.
The volume per day in USD on Ethereum NFTs has been among the biggest recorded since February, according to analytics, with popular marketplace OpenSea witnessing about $550 million in volume on May 1 alone.
When looking at OpenSea transactions and USD volume, Tom Schmidt, a partner at venture capital company Dragonfly Capital, finds a similar picture.
come on, man pic.twitter.com/CTJFldAHNk
— Tom Schmidt (@tomhschmidt) May 3, 2022
Within the NFT market, sub-sectors are forming, and although certain segments of the oversaturated market are experiencing a decline, others are witnessing significant advances.
Nansen’s analytics engine, which monitors NFT collections by category, reveals that “Blue Chip” NFTs – well-known and highly respected brands like the Bored and Mutant Ape Yacht Club and Azuki tokens — surpass art and gaming tokens by a wide margin.
The Nansen Blue Chip-10 Index, which tracks the top 10 NFT projects, is up 81 percent year to date (YTD), while the indexes tracking the top art and gaming NFT collections are down 39 and 49 percent, respectively. The pattern of NFT market money concentrating in the top collections was highlighted in an analysis by NFTstatistics.eth, which posted a chart in late April demonstrating how the top 5 collections are driving the Ethereum NFT market.
This trend continues: BAYC, Azuki, CloneX, Doodles & now Moonbirds separating themselves from everyone else.
I've talked about large-caps outperforming, but it's really the top-5 projects driving all the gains. pic.twitter.com/UsUlwHMJ9M
— NFTstatistics.eth (@punk9059) April 26, 2022
“Right now, there’s a clear pattern that five or six of the most successful projects are sharply outperforming while the rest are flat to down,” NFTstatistics.eth, a pseudonymous NFT market analyzer, told.
Nonfungible’s data shows a spike on May 1, with the number of purchases and active wallets that day reaching levels not seen since November 8, 2021, directly aligning with the world record-breaking event (and Ethereum breaking) Yuga Labs’ metaverse land sale, on the other hand, refutes the allegation that NFT sales are “flatlining.”
It’s unclear why the Nonfungible data used by the WSJ differs from Dune’s, although it could be due to Nonfungible’s inclusion of sales numbers from P2E gameAxie Infinity.
According to CryptoSlam data, volume for the popular play-to-earn touched an all-time high of over $40 million on November 4, 2021, before gradually declining to under $500,000 today. However, NFTstatistics show a decline in the popularity of a P2E game. “It’s an extremely different message than ‘NFTs are collapsing,'” explains eth.
@DJohnson_CPA suggests that AxieInfinity was so big it dominated numbers in November and has since collapsed. Seems possible.
From where I sit, this is an extremely different message from "NFTs are collapsing"https://t.co/lq66GbhbAj
— NFTstatistics.eth (@punk9059) May 3, 2022
While the current debate centres on Ethereum NFTs, Solana is quickly becoming a popular blockchain for this type of asset, and it is the second-largest blockchain for NFT sales volume behind Ethereum. Okay Bears, a Solana NFT project, topped OpenSea’s 24-hour sales tracking for the first time last week, and is currently fourth in 7-day sales volume on CryptoSlam, behind the Mutant Ape Yacht Club, with over $47 million worth of transactions.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.