Posted onFebruary 9, 2023
Ethereum NFT Collections Lost Nearly 60% of Their Market Cap in 2022: Report
A survey of 81 nonfungible token (NFT) collections on the Ethereum blockchain showed a sharp overall market cap loss in 2022, according to a report by DappRadar released on Feb. 9. However, losses were not even shared.
The Ethereum NFT market was worth $9.3 billion in early 2022, according to DappRadar’s valuation, and that figure dropped to $3.7 billion by the end of the year – a 59.6% loss. The value of Ether (ETH) affected all values:
“It is also important to consider that ETH lost 60% of its value last year, which had a strong impact on the value of the NFTs.”
The NFT market peaked at $19.1 billion in February 2022, outperforming Bitcoin (BTC) and Ether until the Terra/Luna collapse in May. By the following month, NFTs had lost 88% of their value. The market hit the low of the year at $2.2 billion in late November, the month of the FTX’s collapse. Thus, the market ended the year 68% higher than that low. The report noted:
“This withdrawal from the NFT market was not a reflection of NFT usefulness, but rather a result of bad actors and market manipulations.”
Yuga Labs accounted for two-thirds of the market by 2022, with its CryptoPunks and Bored Ape Yacht Club collections holding 46.7% of the market themselves. The Otherdeeds collection was Yuga Labs’ loss leader, down 86.15%.
Related: Should buyers of Bored Ape be legally entitled to refunds?
The Azuki, Pudgy Penguins, and Degen Toonz collections were the only ones to “launch in 2021 or early 2022 and experience significant market cap growth”, with increases of 113.89%, 260%, and 204%, respectively.
NFT collections launched after the Terra/Luna collapse performed better. The report cites Potatoz (+134.68%), Renga (+211.63%), DigiDaigaku (+209.88%) and God Hates NFTees (+1,653.28%) as examples.
The report also traced the declining share of collectibles in the NFT market share. Collectibles started 2022 with over 90% of the market, but maintained well below 75% in January 2023. The trading volume for NFTs in January 2023 was $870 million.
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