Art, gaming NFTs perform poorly, Metaverse NFTs propel growth in Q1: Report


The non-fungible-token (NFT) market witnessed a significant growth in the first quarter of 2022, outperforming the cryptocurrency market, according a new report by blockchain analytics firm Nansen.The report highlighted the rapid growth of the NFT market and predicted an $80 million market capitalization by 2025.

Nansen, launched five indexes to track which NFTs are the best suitable investments for NFT collectors and traders. This comprises Blue Chip-10 (Top 10 NFTs that can be held as long term investment), Social-100 (Top 100 social NFTs), Game-50 (Top 50 gaming NFTs), Art-20 (Top 20 art NFTs), and Metaverse-20 (Top 20 NFTs in the metaverse).

Blue Chip NFTs are categorised as the most popular NFTs by market capitalisation— and are the least volatile. Some of the Blue Chip NFTs are OpenSea chart-topping collections like Azuki, Clone X, and Doodles. Notably, these NFTs are considered good long-term investments due to their track record of growth and value.

Art NFTs are the most volatile and poor performing segment of the NFT market. Nansen categorises land and real-estate NFTs, avatars and utility NFTs under the Metaverse segment.

The report highlights that the Blue Chip-10 index returned 42.4 per cent growth,  Metaverse-20 index grew by 129.4 per cent in Q1. The Gaming-50 index was the worst performing NFT sector, recording a decline of 24.4 per cent. This was fueled largely by Play-to-Earn and Role Playing Game NFTs.

Traditional gamers have been hesitant to embrace NFTs and aren’t afraid to voice their opinions, as in the case of Ubisoft. The Social-100 index returned a 49.9 per cent increase year-to-date. On the other hand, the Art-20 index saw a 5.5 per cent decline that was attributed primarily to a drop in prices for Generative Art NFTs.

According to the Nansen 2022 Quarterly report, NFT market has also outperformed the broader cryptocurrency market performance year-to-date, as evidenced by the NFT-500 Index’s price appreciation of 49.9 per cent so far in 2022. NFT 500 index is the overall NFT index.

The report noted how the NFT market was not immune to the correction seen in the crypto market overall from last February, but that downtrend seemed to reverse in the last month: the NFT-500 jumped 5.9 per cent in March.

“NFTs represent a segment of the cryptocurrency market that is fast-growing and dynamic, and this is especially the case for retail investors. However, for NFT market participants looking to collect, trade, or invest in NFTs, it is imperative to understand the competitive NFT market landscape,” the company added.

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