Nansen, a blockchain data analytics platform, published its quarterly analysis on the state of nonfungible tokens (NFTs), on Tuesday. The analysis emphasized the NFT market’s strong rise over the cryptocurrency market year to date, and it anticipates an $80 million market valuation by 2025.
According to the Nansen 2022 Quarterly NFT Report, the NFT market has outperformed the cryptocurrency market year to date, with a 103.7 percent return in ETH and an 82.1 percent return in USD. Despite a decline in global markets across most asset classes at the end of February 2022, the NFT-500 increased 5.9 percent in the past 30 days in March.
NFTs see popularity among retail investors
NFTs have “proven to resonate with retail investors over the past year,” according to Louisa Choe, research analyst at Nansen, notably in Q1 of 2022, and only time will tell which industries become the market’s driving force as more and more artists, producers, and builders innovate.
The volatility of each of these sectors varies, and according to the Nansen research, Blue Chip NFTs, which are classified by market size, are the least volatile. Blue Chip has been assigned to OpenSea chart-topping collections such as Azuki, Clone X, and Doodles. This is most likely due to their growing popularity in the crypto world and the fact that they can be considered strong long-term investments due to their track record of development and value.
Metaverse, Art NFTs
The report, on the other hand, identifies Metaverse and Art NFTs as the most volatile segments of the NFT market. The Metaverse portion includes land and real-estate NFTs, as well as avatar and utility NFTs, according to Nansen. It can be difficult to assess prices, particularly for virtual lands like Decentraland or The Sandbox.
The subjective aspect of value perception, as well as art’s somewhat illiquid character, contribute to its volatility when it comes to art NFTs. The most popular component of art NFTs overall, according to Nansen, is generative art, and the majority of metaverse and art market players are “speculators.”