Semi-Annual Crypto/NFT Market Recap
Greetings Warriors!
It's that time of the year again! When I summarize the current state of the NFT/Crypto markets. In this article you will get a feel for the overall current market sentiments. The ups,the lows, the in between; the good, the bad, and the super ugly!
As this article comes to life, the crypto market cap stands at $1.05 trillion, marking a 25% Year-to-Date surge. Bitcoin at $26k from $16K and ETH at $1649 from $1193, all in all some respectable gains, despite the recent retreat that swept over us this week. Let’s take a deep dive into the events that have occurred since the beginning of the year that helped shape the current conditions we see today.
Bitcoin started the year with a bang! It quickly rose from $16k to $23k by the end of January and topped out at a little over $30k in July. Similar results were mirrored by the overall crypto market as well. Bitcoin is still a far cry away from the high of almost $70K, but we are still in an upward trend for the year. However, there are signs that we may be headed towards a major correction ahead.
With a pivot towards NFTs, let's jump into the numbers below. As far as google search is concerned OS is still the largest selling NFT platform and most major projects are listed there. This is the basis for the benchmark.
While the crypto market have been booming, NFT sales as a whole have not. Last year we ended December with the total monthly sales amount equating to roughly $200 million and the year started with $5 billion in sales for January. Unfortunately this appears to be a similar pattern for 2013 with January maintaining $200 million in sales and August closing with half at roughly $100 million in sales. The average NFT dollar amount has also decreased quite a bit to a little over $100 per NFT from the $300-$400 mark of the start of year.
Numerous events, both within the global and crypto domains, have contributed to the retreating tides of NFT sales. We are still in a long term downward trend since the bubble popping in November 2021when the market cap almost passed $3 trillion, many gains made during that bull cycle have been wiped out across the board, several DeFi hacks have occurred further removing gains made during the bull cycle, the rise of inflation has also weakened the purchasing power of all currencies across the globe. These events have led to the decrease in NFT sales, which in turn caused and continue to cause artists to sell at a lower price point in order to adjust to the current market conditions.
There have been a major rise in editions and tezos sales have also occurred to meet those lower price points. Some sales have been relatively successful.
Lets review some of the events of the year that led to the prices we see today. The started off with inflation being the big as many people globally started to return to work. Many Nations and government officials made it a top priority to combat inflation at all costs. Many citizens felt the pain of inflation in various aspects of daily life, especially when it came to paying for common goods. Whether you are at the gas station getting gas or at the grocery market getting milk and eggs. We are all feeling the inflation pinch, This has caused many to cut back on luxury items such as NFTs purchases.
Fresh off the heels of the FTX debacle which caused a mass crypto exodus of fund managers and investments, investors were prime to dip their feet back into crypto again. With the Feds desperately trying to fight off inflation, investors saw opportunities in alternative investment vehicles such as crypto. Injecting almost half a trillion dollars back into the crypto markets since the start of the year. Unfortunately there have been a plague of crypto hacks and additional scrutiny of crypto exchanges like Coinbase and Binance by the SEC that have left many investors with their crypto stolen or frozen. As a protective measure against regulation and crypto exchange hacks many investors have transferred their crypto from exchanges to self custody and are beginning to use decentralized exchanges. If you are currently using an exchange or software wallet I highly recommend you using the ledger hardware wallet for maximum security to keep your crypto safe! It's a product I have been using for years and trust.
On the bright side, considerable amounts of investments have flowed into the technology space. Generating activity in both the crypto and NFT space. Notably, a groundbreaking stride has been the advancement of AI technology. 2023 will go down in history as the dawn of AI adaptation from Chat GPT usage skyrocketing and bringing birth to thousands of new companies and generative art with Midjourney taking the lead and many more following in trend. The surge in demand has propelled chip manufacturers like Nvidia to unprecedented heights in revenue, reflected by a remarkable surge in their stock valuation, soaring from $150 to $400 per share this year. The resultant scramble for these chips mirrors an insatiable market appetite, rendering supply unable to keep up with demand.
In conclusion the crypto markets are still in an upward trend from the start of the year with a possible sign of a major price correction in the near term. Investors find themselves fatigued by the persistent lack of regulatory clarity within the crypto realm and the concurrent push towards platforms such as Coinbase and Binance. The sweeping impact of crypto hacks has eroded a substantial portion of profits, while DeFi returns have noticeably waned; With the rise of inflation traditional markets are providing higher yields with safer products for investors to turn to.
Interestingly, the bullish momentum of the crypto sphere has not synchronously translated to NFT sales. This sector has experienced a notable decline exceeding 50%, and this shift is mirrored in the lowered pricing benchmarks of NFT offerings. The concept of 1/1 art, once priced higher, has seen a decrease, and more economical edition options and platforms have emerged. I always give you the good, the bad, and the ugly. There are some positive notes that the relative NFT market is actually thriving if you remove the crazy NFT boom hype that started in 2021. Back then NFT sales were less than $100k a day and today we have been maintaining at least $2-$3 million daily, that's a 20-30x increase; nothing to sneeze at. I would say that’s really good news. The NFT market sales may not be what it once was last year but it’s still thriving and many continue to grind and create beautiful works of art, others are behind the scenes improving the infrastructure, helping with marketing, or like me spreading good vibes to press on!
I don’t know about you but I’m here to stay!
If you have any questions or like the content don’t be a stranger, leave a comment below.
