Ethereum NFT Market Suffers 59.6% Loss in 2022
TECH DIGEST- The Ethereum Non-Fungible Token (NFT) market, which accounts for over 70% of the sector, experienced a significant loss of 59.6% in 2022 due to unfavorable macroeconomic conditions and policies.
The market began the year at a valuation of $9.3 billion and ended the year valued at $3.7 billion, according to DappRadar, which used machine-learning algorithms to generate the figures.
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The popularity of NFTs surged in 2021, with high-profile sales generating significant buzz and driving up prices. However, in 2022, most collections faced depreciation towards the end of the year. Yuga Labs’ NFT collections market cap represents 67% of the entire market value, but other collections, such as Otherdeeds, experienced significant declines, with the largest being an 86.15% decline in its market cap.
The retraction of the NFT market was not a reflection of NFTs’ utility but rather a result of bad actors and market manipulations. Despite this, many promising projects emerged from the bear market, showcasing the potential of unique digital assets.
The first half of 2022 saw a boom in NFTs and hype around the unique digital assets. However, this growth was not sustainable, and the Terra Luna collapse in May 2022 had a devastating impact on the NFT market, leading to an 88% decrease in value by June. The FTX collapse in November further exacerbated the downward trend, with the market cap reaching its lowest point of $2.2 billion by the end of the month.
Although 2022 was a challenging year for the NFT market and the dapp industry as a whole, some NFT collections still managed to thrive and appreciate their market cap. So far in 2023, the NFT market has shown bullish signs, especially considering the positive on-chain metrics seen in January of the new year.
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