NFT sales are up 43%, but are we really in a bull run?

The 2022 bear market left many in the NFT ecosystem bruised and battered. Sales plummeted, prominent figures to the left, and consumer brands began to wince at the idea of ​​launching their own non-expendable offerings. But it seems that the new year could have brought some change.

As the new year approached, the NFT market began to trend upward. NFT sales volume from global markets increased 43 percent this month, according to Cryptoslam data. With rising project floors, currency pumping prices, and open editions are all the rage, community sentiment has also increased considerably. Of course, it’s not just positivity that’s moving the needle on Web3, but a statistical uptick that’s driving the NFT space forward.

Before we get too far ahead of ourselves with bullish thinking though, there are a few things to consider before calling this a full-blown bull market. So let’s do an analysis of the markets to see what is really happening and determine what projects, or other things, are driving this change.

Are NFTs back?

First, we have to clarify one thing. For the collectors, artists, and Web3 builders who have worked steadily for the past few years, NFTs never really went away in the first place. Why? Because NFTs are much more than money or markets. They are innovative technology that can be used for a myriad of purposes. So saying “NFTs are dead” is like saying “VR is dead”. The markets may be down; However, the technology is very much alive and well, but I digress.

To those who only dabbled in Web3 or are on the outside looking in, NFT markets they were largely dead, and now they seem to be on the rise once more. However, the situation is very different this time. In contrast to the NFT boom of 2021, the market has matured and become less of a wild west free-for-all.

To be honest, million dollar sales and trades happen much less frequently than before in the NFT space. But maybe this is for the best. As with declining mainstream coverage and attention, which was often only focused on the financial side of NFTs in the first place, the NFT community went back to basics. In 2022, creators and collectors alike were forced to reevaluate why they became interested and involved in crypto art in the first place.

Clearly a lot has changed in Web3 during the downtrend, and perhaps this most recent rally is simply the market showing this change as a result. because according to Dune Analysis BoardOpenSea, after bottoming out at around $253 million in total ETH NFT sales volume in November (the lowest month since June 2021), rallied throughout January, reaching over $350 million in volume. of sales (with almost a full week still left in the month).

So why is OpenSea reporting its increase in ETH NFT sales volume for the first time since April 2022? Is it a direct result of the recent rise in the price of ETH or is there something more to this market revival? The answer may surprise you. Or maybe it won’t… because we can directly point to the forces at play in this latest NFT bombshell. And it really all starts with ETH.

Why are NFTs pumping?

Any self-respecting NFT collector will easily tell you that in the grand scheme of things, 1 ETH equals 1 ETH. That is, regardless of coin prices, cryptocurrencies and NFTs will always retain their value in some respect. It is a common perception of the NFT space that pricing should not be the focus of the decentralized creative industry building on the blockchain. And while ETH could make the weird and wide world of NFTs go round, as noted above, there is more to Web3 than just stacking coins.

However, these same value-spitting collectors will also tell you that when the ETH price changes, the NFT prices change as a result. It is the yin and yang of the blockchain, and it often goes both ways.

In the first case, ETH prices fall. As a result, people start to panic sell their NFTs. This can lead to strong selling for a while, but if ETH doesn’t recover in a timely manner or falls further, selling slows. View OpenSea monthly sales volume side by side with him ETH price for reference. Although January 2022 was a record month for NFT sales (even with ETH prices halved compared to the previous month), things were different when the summer crash hit.

In case number two, ETH is trending higher, which could lead to a strong sell-off that breathes new life into the NFT space. This was part of the equation for the initial 2021 bull run and might be happening now. But whether or not NFTs made the ETH bomb or vice versa the first time depends on who you ask. However, in any case, it is important to note that these two scenarios depend on the history of NFT trends in recent years. A lot has changed and is changing in Web3 and no one knows if these trends will be experienced or not.

So, is the bullfight coming up?

Beyond the price action though, one of the main driving factors for this current NFT pump comes from a few specific projects. Those in the NFT space that actively innovate, create, or help the ecosystem sustain itself seem to be making leaps and bounds. And one of the recent advents that propels you forward is not really an advent for everyone. Instead, the resurgence of Bored Apes and, of all things, Open Editions (OE) has the NFT space buzzing.

Open Editions are a type of NFT release where instead of minting and selling a limited set of identical NFTs, creators leave the bookends behind and allow collectors to mint as many editions as they like, or limit to a few per wallet. and set a time limit for minting. Jack Butcher, with his influential Checks project, is one of the most prominent leaders in the recent charge for open publishing prosperity.

Starting out, Butcher’s OE sold more than 16,000 issues at $8 each as satirization of social media verification. After OE closed, Butcher began toying with unique recording dynamics that would add value to those they coined, and alongside his efforts, the NFT space did its thing, introducing dozens of derivatives to the market. Then the trend caught fire, and subsequently numerous creators decided to launch similar businesses of their own using Manifold’s services to facilitate.

In January, the NFT space witnessed numerous creators large and small launching OE projects, and the numbers continue to grow. However, while ETH pumping and open edits have been two defining factors of this latest NFT rally, one that has been openly driving the entire ecosystem is the recently launched Bored Ape Sewer Pass.

As part of a new ongoing campaign centered on a new story arc called The trial of Jimmy the monkey, Sewer Pass NFT became claimable in mid-January, generating over $20 million in secondary sales volume amid the launch of a competitive skill game called Dookey Dash. Considering the grip Yuga and BAYC have had on the NFT ecosystem for two years now, it’s no surprise that NFTs are pumping at the same time as another innovative effort from Bored Ape.

Aside from BAYC, what can the NFT space expect from this convergence of an ETH pump, OE resurgence, and Web3 branding initiatives? As the first quarter of 2023 continues and tax season approaches, the NFT space could well become a strenuous place to be once again. In the near term, however, this trend of rising prices and rising vibes seems likely to continue.