NFTs are in the process of reaching 111bn in volume

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A total of 37 billions of dollars was sent to NFT markets in the first four months of the year, compared to 41 billions of dollars of all 2021. Yuga Labs, creator of Bored Ape Yacht Club, leads the way , with three of the top five projects by volume. The Otherside project in April is already the fifth largest project in history by volume. NFTs aim to achieve 111 billions of volume this year As the cryptocurrency market falters from this week’s downfall (mostly, Earth), Cointext thought it would be prudent to step back and assess how far this has come. Perhaps no sector has seen as much progress as NFTs. Before May 1st, this year they were sent 37 billions of dollars to NFT markets . This already puts him on the verge of overtaking the entire total from 2021, which has come to 41 billions, according to a recent study by Chainalysis . If we take this as a reference point, the volume of NFT expected for 2022 is 111 billions of dollars. However, the future of this relatively new sector is still unclear and far from predictable, not to mention the fallout from this week’s market turmoil that could impact volume going forward. The last week hasn’t been easy for the NFT market, as can be clearly seen from the Yuga NFTs, who have seen a massive drop in 31%, while the market capitalization of the sector took a hard hit, falling to 14, 5 billion dollars. Coinbase’s NFT Marketplace disappoints The Chainalysis report on the NFT market comes a few days after the launch of Coinbase’s NFT marketplace. So far, however, activity on the Coinbase market has been extremely disappointing. On the first day of trading, only 150 transactions were carried out on the platform for a total volume of about 75.000 USD. These are not good results for a billion dollar company like Coinbase, although it will likely push hard to promote the market. All in all, the NFT market remains a special phenomenon. . Few expected this to become a multibillion dollar business, but we have now come to that point. However, this means nothing about the sustainability of the market. Only time will tell to what extent interest in NFTs will remain at this level. Volatility Looking at the market from a seven day perspective, most of the collections lost beyond 50 percent of its value. Aside from the Yuga NFTs hosted on Ethereum, more than eight blockchains occupying the former 10 positions suffered huge losses. The number of new portfolios making purchases also suffered a big stop this month. However, these moves have not caused analysts to backtrack on their predictions on the digital art market. Large spikes in value sent so far this year have occurred around February. – when OpenSea finally saw significant competition in the form of LooksRare – and again in April, due to the Otherside mint launched by the founders of Bored Ape Yacht Club Yuga Labs. Bored Ape Yacht Club It’s only been a year since the launch of the Bored Ape Yacht Club, but it has now become the flagship collection, boasting a minimum price of 99 ETH (again 210. 000 $ even after the decline of the last few days). Looking at the rankings of all times on OpenSea we see that the dominance of the BAYC is evident. CryptoPunks is still number one in volume terms of all time, but BAYC founder Yuga Labs owns the IP rights to this collection as well. Additionally, three of the first five projects are launched by Yuga. Mutant Ape Yacht Club, and the aforementioned Otherside mint, released only last week, boast volumes of respectively 250. 000 ETH and 390. 000 ETH . The Otherside project is particularly intriguing, as it is an attempt by Yuga Labs to launch their own metaverse, with collectors striving to purchase “acts ”To“ land ”in the virtual world. The interesting things about this project, beyond the astounding volume shown in the image above, are two. The first is the gas war that took place on Ethereum during the mint, with transaction fees climbing to a barely credible four-figure. Second, ApeCoin’s price action, which was required to buy NFTs, told a story: it was on offer all the way and then plummeted by 50% after the mint. The graph below of Kaiko shows that funding rates turned negative for ApeCoin as well soon after the announcement that NFT investors would need the coin to participate. This suggests that traders were shorting the coin and predicting it would fall after the announcement. Of course, as the orange price line also shows, this turned out to be a very wise move (despite a brief rebound thanks to a tweet from Elon Musk). Conclusions As discussed above, extrapolating the 37 billions of dollars of NFT volume for the first four months of the year, the forecast is 111 billions of dollars for the year. Of course, given the market crash of the past few days, doing a direct extrapolation is not necessarily a reasonable thing. In context, the entire cryptocurrency market has held 14 trillion dollars in trading volume in 2021, with Bitcoin responsible for 9.5 trillion of that figure. This means that the rest of the market amounted to 4.5 trillion. If NFTs hit 111 billions of dollars this year, which means that it would still represent only a relatively low portion of the non-Bitcoin trading volume, around 2.5%. So, perhaps there really is even more room for NFTs to grow, especially considering the extremely short period of time they have been used for.

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