Where NFT Market Stands In 2022?
Markets are taking the moves by Central banks to tame the high cost of living positively. The moves will soon change the markets. High-interest rates slow growth, but they spell good news in the long term by sparking the markets into the pre-inflation momentum.
However, while many assets await a rebound in investor confidence to shoot higher and surpass some historic highs set previously, some are still showing slow signs of growth. NFTs had some positive performances at the start of May, with figures showing an increased investment of $3 billion in various marketplaces, including OpenSea. While volatility is still rife, pushing people to learn what is forex trading to diversify their assets in PrimeXBT or other platforms, NFTs barely felt the massive sell-off of volatile assets that created a bearish market run, which reduced the overall market cap of some assets.
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How Are NFTs Performing?
A scrutiny of the NFT market in PrimeXBT shows that the NFT 500 has witnessed a massive plunge from the start of the year until May—dropping by a hefty 27 percent. The figures highlight that NFTs were in the same boat as many other assets in the stock market, including crypto. While the drop is a massive indicator of a bearish situation because it surpassed the 20 percent mark that sets the base point, NFTs have outperformed their 2021 trading volume.
In 2021, the entire volume of money invested in NFT marketplaces stood at about $37 billion. The figure has increased by about $3 billion to stand at about $40 billion as of May 2022.
The net increase is better than the experience in crypto and the primary stock market. In the crypto domain, up to 50 percent of the value disappeared. Bitcoin lost about 50 percent of its market value in January from its all-time high of over $65K.
According to NFT 500, an NFT market index, the bull market in the NFT space stopped in February, coinciding with the heightened tensions in Eastern Europe and the increasing rate hikes by the central banks. However, the launch of the bored ape yacht club reconfigured the NFT markets, making them pick up some gains in the later parts of Q1.
What Is The Mood Of The NFT Market In The First Half Of 2022?
According to the figures in PrimeXBT, many markets including those of NFTs witnessed a calm scenario soon after January. Investors in the space were less confident. The buying momentum that started in late 2021 disappeared somewhere in February when many investors started approaching volatile instruments with a lot of caution, especially as inflation was growing at an unprecedented rate.
From the Google Analytics tool, the search interest for NFTs fell by 30 percent from January peaks, which is a record figure. The figure highlights that inflation and the war in Europe are significant factors in the market slump that annulled the wild predictions of a better year in the digital space and the investment market.
Other indicators, including the ones showing the first-time NFT buyers and the trading volume, also showed a slump as 2022 progressed. In January, first-time buyers’ ranges peaked. However, as of May, the tables turned as the number of returning buyers slumped.
Noteworthy, first-time buyers are the drivers of the NFT economy; they help increase the value of new NFT assets in the market.
Will the NFT Market Continue to Grow?
When inflation reaches a peak and economies reverse the momentum picked when countries abandoned lockdowns, the inflation situation might calm. The base rate increments set by central banks will kick in to slow the economies in the future. The slump will lead to lower inflation and rejuvenated markets. NFTs will benefit from rejuvenation.
Final Remarks
Stock and crypto markets have experienced one of their poor years. However, as the increased interest rates affect the markets, they will likely slump. However, the period will also reduce inflation, which will help people invest easily.
Last Updated on October 27, 2022
