On February 9, DappRadar published a report showing that the market cap value of Ethereum NFT fell by 59.60%, from $9.3 billion in 2022 to around $3.7 billion in early 2023.
DappRadar’s study is based on market capitalization analysis of 81 of the largest NFT collections running on the Ethereum network.
2/ The market capitalization of 81 Ethereum collections analyzed by our machine learning algorithm saw a 59.60% decline in USD value, from $9.3bn at the beginning of 2022 to $3.7bn by the end of the year. 📉
—DappRadar (@DappRadar) February 9, 2023
According radardapp the Terra Luna collapse in May 2022 was the main cause of the loss of 88% of the market capitalization of NFT projects running on Ethereum in June 2022.
Therefore, the drop in the market capitalization of NFT projects was not due to a lack of interest from investors but rather due to the manipulations of bad actors in the ecosystem. This is probably the main cause of the broader collapse of the cryptocurrency industry, as during the FTX crash, the market capitalization of the entire NFT ecosystem plummeted behind the global cryptocurrency market.
These were the highest-earning NFT collections on Ethereum since 2022
The report noted that some projects launched during 2021 and early 2022 saw “significant market capitalization growth” of up to 260%. Among those projects were the Azuki, Pudgy Penguins, and Degen Toonz collections, whose market capitalization appreciated by 113.89%, 260%, and 204%, respectively.
Newer NFT projects, which launched after the Terra Luna collapse, include: The Potatoz with 134.68% market cap growth, Renga with 211.63%, DigiDaigaku with 209.88% and God Hates NFT with 1653.28%.
It is worth mentioning that all of these projects managed to see spectacular growth, despite ETH, the native currency of the Ethereum network, experiencing a 60% price drop over the past year due to the bear market.
Bored Ape Yacht Club dominates the market
According to DappRadar, Yuga Labs, the parent company of the Bored Ape Yacht Club project, dominated the Ethereum network’s NFT market, “establishing itself as a leading player in the NFT industry,” despite the exponential decline of other projects.
Despite Yuga Labs taking 67% of the total value of the NFT market on Ethereum, Bored Ape Yacht Club’s market cap depreciated 64.92% from $2.6bn to $934m. dollars at the end of 2022.
However, that didn’t stop Yuga Labs from buying two of the biggest NFT collections on the market, CryptoPunks and Meebits, for a to-date undisclosed sum. Both collections are already experiencing a significant rebound after suffering falls of up to 60% in 2022.
But now that the crypto market is showing signs of recovery, the NFT ecosystem probably has some chance to breathe. And we may be seeing green pastures in the future, as recently, trading activity around top-notch collections has started to pick up, and now there are even NFTs taking over the Bitcoin network.
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