On Tuesday, blockchain data analytics platform Nansen released its quarterly report on the state of non-fungible tokens (NFTs). The report highlights that the rapid growth of the NFT market has outpaced the cryptocurrency market so far this year, and predicts that the NFT market will be worth $80 million by 2025.
As previously reported by Cointelegraph, Nansen recently released six NFT indices weighted by ETH-denominated market capitalization: Nansen NFT-500, Nansen Blue Chip-10, Nansen Social-100, Nansen Gaming-50, Nansen Art-20 and Nansen Metaverse-20.
According to the Nansen 2022 NFT Quarterly Report, the NFT market continues to outperform the cryptocurrency market so far this year, returning 103.7% in ETH and 82.1% in USD. Despite a downturn in most asset class markets around the world at the end of February 2022, the NFT-500 Index gained 5.9% in March over the past 30 days.
Nansen research analyst Louisa Choe said NFTs "have proven to resonate with retail investors over the past year," especially in the first quarter of 2022, adding that as more artists, creators Builders and builders are innovating, and only time will tell which industries will become market drivers.
Volatility can vary by industry, and Nansen's report shows that blue-chip NFTs by market capitalization have the least volatility. OpenSea chart-topping series such as Azuki, Clone X, Doodles are classified as blue chips. This is likely because they are already well-known in the crypto community and can be considered good long-term investments due to their track record of growth and value.
On the other hand, the report considers Metaverse and artistic NFTs to be the most volatile areas of the NFT market. Nansen lumps land and real estate NFTs, avatars, and utility NFTs into the Metaverse. Assessing prices, especially virtual land in Decentraland or The Sandbox, can be a challenge.
In artistic NFTs, the subjectivity of value perception and the relative illiquidity of art are also factors that lead to its fluctuations. Nansen called generative art the most popular art NFT overall, noting that most metaverse and art market participants tend to behave as "speculators."
The Nansen Index also noted that the overall growth of the gaming ecosystem has declined. Compared to other NFT sectors, the Gaming-50 index has seen the largest decline in performance year-to-date, with play-to-earn (P2E) and role-playing game (RPG) NFTs seeing the largest declines. Traditional gamers have been hesitant to accept NFTs, and they are not afraid to express their views, such as in the events of Good Luck Games, Ubisoft or GameStop.
Recently, Nansen released another report on the popular earn-and-play game Axis Infinity, stating that there are currently more than 2.8 million unique addresses holding 11.1 million Axies. However, the price of AXS continued to fall after the Ronin Network, the underlying blockchain of the Axie earning gaming platform, lost $625 million in a hack.
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