According to CoinDesk, while cryptocurrencies like Ether have posted gains of over 10% since the start of the year, non-fungible token (NFT) prices have not experienced the same growth. Ether has seen an increase of around 70% year-to-date, but NFT valuations have not followed suit. Nansen's NFT-500 index, which measures the valuation of the top 500 NFTs, has dropped 50% year-to-date when denominated in ether and 16% in dollar terms. The Blue-Chip 10 index, which measures the valuations of prominent NFTs such as CryptoPunks and the Bored Ape Yacht Club, is down 44% in ether terms and 1.7% in dollars.
OpenSea, the largest NFT marketplace, has also experienced a decline. In January 2022, the platform was clearing $387.48 million in fees every month and $120.45 million in revenue. Now, fees have slumped to $6 million a month and revenue to $1.39 million. Nick Ruck, COO of ContentFi, a decentralized IP-focused content financial ecosystem, said that NFTs have survived their first market cycle but have yet to take on a new jumping point in technology to usher in more user interest. He added that many new innovations are still being built to increase the use cases of NFTs.
There are some signs of growth in the market, including a growing market of NFTs based on utility rather than just images. Bitcoin ordinals also continue to grow in popularity, with miners appreciating the fees. Sora Ventures' Jason Fang attributed their success to them being a hub for the growing development of something similar to a layer-2 for the Bitcoin blockchain. David Mirzadeh, Ecosystem Finance Lead of Taiko, says this utility is also the narrative driving the NFT rebound. He believes that NFTs will recover some of the ground they have lost once they move beyond just speculative images to assets with utilities in areas such as games, music, and social.
