A quarterly report released by a blockchain analytics platform suggests that the NFT market is faring much better than the overall cryptocurrency market.
NFTs: The Champions of Quarter One
Popular blockchain analytics platform, Nansens recently released its quarterly report on non-fungible tokens (NFT). In February, the firm launched its NFT market (NFT-500) fund to track the broader NFT market. In addition to this, the fund would also track Blue Chip-10, Social-100, Game-50, Art-20, and Metaverse-20.
Nansens’ quarter one report shows that the NFT market has primarily outperformed the cryptocurrency market this year, although there are significant differences in the growth of different NFT sectors. Overall, the NFT market has seen more price growth than the crypto sector, and metaverse-related NFTs appear to be the biggest winners.
Due to unforeseen circumstances, the overall crypto market plunged by 11% in February. The NFT market was not immune to this correction, but according to Nansens’ report, that downward trend gave way to a reversal in March, with the NFT-500 increasing by 5.9% in March.
The report also showed the different performances of stocks within the NFT market. The metaverse-20 index increased by 129.4% in quarter one, while the gaming and art sector NFTs, Gaming-50 and Art-20, witnessed a decrease in growth. These decreases result from a decline in Play-To-Earn and Role-Playing Game NFTs (for the Gaming-50 index) and a drop in prices for Generative Art NFTs (for the Art-20 index).
NFTs are the new kids on the Block
This recent outperformance of non-fungible tokens (NFTs), when compared to other crypto assets in the crypto market, is symbolic of the asset’s dynamism and the fast rate at which it is growing.
The NFT sector contains a wide range of assets that differ widely in volatility. The Nansen report shows that Metaverse NFTs are the most volatile, whereas Bluechip NFTs, consisting of Azuki, Clone X, and Doodles, are the least volatile.
Louisa Chloe, a research analyst at Nansen, had this to say about the matter.
“The NFT segment of the cryptocurrency market is fast-growing and dynamic and has proved to resonate with retail investors over the past year, with significant growth in Q1 of 2022. As more artists, creators, builders, and community members innovate with the NFT market, we believe we will see a rebalancing of which sectors become its driving force.”
The report also indicates that in addition to outperforming the rest of the cryptocurrency market in Q1, NFTs were also “relatively uncorrelated” to other crypto assets.
The Best Is Yet To Come
With the year still in its early stages, one can only wonder what other surprises lay in store. The NFT market is clearly on an upward trajectory, and, barring no unfortunate occurrence, it should record a massive year.
We can trust that our friendly neighborhood blockchain analytics platform, Nansens, will be with us every step of the way, providing comprehensive reports for each quarter of the year.