The role of investors and the lessons of the NFT hype cycle

Despite the impressive growth of Magic Eden, it is essential to reflect on the lessons of the recent past in the bull and bear market of NFTs. 

Between 2021 and 2022, the NFT market experienced an unprecedented hype cycle. With collections like CryptoPunks and Bored Apes gaining enormous traction.

However, this euphoria was followed by a sharp decline, with the market capitalization of NFTs dropping drastically from a peak of 526 billion dollars in May 2022 to only 18 billion dollars in August 2023, a 97% decrease in value.

This collapse has highlighted the risks associated with investing in NFT. With a report from dappGambl from September 2023 revealing that 95% of NFT collections, among the 73,257 analyzed, had a market capitalization of zero Ether. 

These data show how volatile and unpredictable the NFT market is. Furthermore, they highlight the need for more sustainable and long-term approaches, such as the one proposed by the Magic Eden Foundation with the ME token.

Exponential growth of the Magic Eden platform

The growth of Magic Eden has been impressive, and the launch of the ME token represents a further step forward in its expansion. 

The platform has surpassed 6 billion dollars in total trading volume, a figure that represents over 60% of all revenue generated by NFTs.

This success was partly due to Magic Eden’s ability to surpass its competitors, such as Blur and Yuga Labs, with a volume of NFT trades that reached 756.5 million dollars in March 2023. 

Marking therefore an increase of 194.4% compared to the previous month. 

This significant increase in trading volume has not only solidified Magic Eden as a leader in the NFT market, but has also demonstrated the robustness of its infrastructure and the trust of users in the platform.