NFT Market Grows More Than Crypto Market, According to Nansen Report

Nansen, a blockchain data analytics company, recently published its quarterly study on non-fungible tokens (NFT)† The analysis highlighted the NFT sector’s year-to-date outperformance in the cryptocurrency market, projecting a market valuation of $80 billion by 2025.

The NFT market has overtaken the cryptocurrency market this year, according to the Nansen Quarterly NFT Report 2022, with a year-to-date return of 103.7% in ETH and 82.1% in USD. Despite a decline in global markets in most asset classes in late February 2022, the NFT-500 gained 5.9% over the past 30 days in March.

nansen report - nfts has overtaken cryptocurrency
According to the Nansen report, NFTs have outperformed cryptocurrency since last year

Louisa Choe, author of the report, said: “The NFT market continues to outperform the cryptocurrency market year-to-date with a 49.9% year-to-date return when expressed in ETH.”

The volatility of each of these sectors varies, and according to Nansen research, Blue Chip NFTs, which are ranked by market size, are the least volatile. Azuki, Clone X and Doodles among others open sea chart-topping compilations, were referred to as Blue Chip.

Nansen Report - Less Volatile First Order NFTs
According to the Nansen report, blue NFTs are the least volatile

This is likely due to their growing popularity in the crypto world and the fact that they can be considered solid long-term investments due to their track record of development and value.

The composition of the Social 100 index remained virtually unchanged before and after the rebalancing. However, the share of access and membership NFTs and utility NFTs has increased.

social nfts nansen
Social NFTs performed well with Access and Membership NFTs showing good growth

Measured in ETH, the Social-100 Index is up 49.9% year-to-date, but measured in USD it is up 37.5%.

Access and membership NFTs and utility NFTs include NFTs that provide cardholders access to certain events, products or services. For example the entertainment company mola hosted the Mola Chill 2303 event on March 23. Participants had to purchase passes in the form of an NFT to gain entry to the sci-fi themed event.

Bored Ape Yacht Club also held a dating event in July 2021, which was only exclusive to people who owned a Bored Ape NFT. Social clubs can be one of the main drivers of growth in NFT access and membership.

metaverse and art NFTs, on the other hand, have been considered by research to be the most volatile part of the NFT market. The Metaverse portion, according to Nansen, includes land and real estate NFTs, avatars, and utility NFTs. Prices can be difficult to judge, especially for: virtual country love decentralized or the sandpit

The subjective aspect of assessing value, as well as the somewhat illiquid nature of art, contributes to its volatility when it comes to art NFTs. Nansen showed that generative art is the most popular part of artistic NFTs in general and that the majority of players in the metaverse and art market are “speculators”.

The Nansen indices also show that the overall growth of the gaming industry is slowing. With a drop of -24.4%, the Gaming-50 index fell the most of all NFT niches included in the study.

nansen - gaming-50 biggest drop
The Gaming-50 index has the largest drop of all NFT indices – image from nansen.ai

Despite this drop, the overall NFT market looks very healthy compared to the crypto market. NFTs are a dynamic and rapidly growing area of ​​the cryptocurrency industry, and this is especially true for retail investors.

However, understanding the competitive environment of the NFT market is essential for NFT market participants wishing to collect, trade or invest in NFTs.

With the Nansen Social-100 NFT Index at the top of the annual returns, it seems that a broad approach with a wide range of collections could be beneficial for generating profits. It is therefore essential that market parties do sufficient due diligence before investing.

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