NFTS In 2023. Are still a thing?

NFTS In 2023. Are still a thing?

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The NFT trading volume in Q1 2023 saw a sharp increase, followed by a decline driven by Blur’s incentives and airdrops. The number of NFT holders hit its lowest point in the past 12 months on April 19, with just 11,187 traders. However, the number of holders increased by about 12.62%, reaching around 4.3 million by April, indicating sustained interest in NFTs.

Market Platforms

OpenSea had dominated the NFT royalty market, but Blur surpassed it in mid-February 2023 and remained on par with it in March. Blur’s optional royalty and zero gas fee approach targeted price-sensitive users, making it the new leader in the royalty market share. Real traders are gradually settling on Blur, as indicated by the decreasing number of wash trades on the platform.

Impact of Bear Market

The bear market at the end of 2022 significantly affected the profitability of blue-chip NFTs in Q1 2023. Despite this, some projects like BAYC and Azuki performed well, with the latter’s whales increasing by 100%. However, a gap exists between these projects’ rich and poor holders as whale trading continues to impact profit fluctuations.

Investment Strategies

There are various methods for generating income through NFTs, including buying high-quality NFTs at a low price and holding them for the long term, bulk-minting NFTs from niche projects and selling them at a higher price, and identifying profitable NFT categories for high-frequency trading. Profitable NFT traders generally fall into three categories.

NFT Lending Market

The NFT lending market revived in Q1 2023, with loans amounting to about $25 million from January to March. ParaSpace accounted for the largest market share of the lending market, while NFTFi led in the number of NFT lending users.

NFT and Ethereum

Despite the rise of Bitcoin Ordinals, Ethereum still dominates the NFT market due to its faster transaction speed, lower cost, and wider application range. In 2023, Ethereum’s NFT trading volume accounted for approximately 70% of the overall market’s trading volume, followed by Solana, with a trading volume of 12%, and other platforms at less than 5%.

Future of NFTs

While the NFT market cooled off in the second half of 2022, it is not in decline but is in the early stage of its second major cycle, lagging behind the overall crypto market. The NFT market cap and the number of NFT holders have increased tenfold over the past two years, and it still has significant potential for future growth and adoption.

Recent Developments

New platforms like Blur have begun challenging the dominance of established platforms like OpenSea. However, Ethereum remains the leader in NFT transactions, accounting for more than 50% of total transactions in 2023 YTD.

In summary

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NFTs are certainly still a thing in 2023. Despite market fluctuations, the sector continues to grow and innovate, with new platforms and investment methods evolving. Ethereum still dominates the market, but competition is increasing. The NFT market is not in decline but rather in the early stages of its second major cycle, and many believe it has significant potential for future growth and adoption.

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