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The cryptocurrency market disappointed investors in January due to significant selling pressures, but the NFT market experienced notable increases. Accordingly, indexes tracking NFT collections prices rose by nearly 10% in January, outpacing many cryptocurrencies and the altcoin king Ethereum, which gained just over 2%.
What’s Happening in the NFT Market?
The NFT-500 index, which tracks the top 500 most valuable NFT collections by blockchain data analytics platform Nansen, recorded a 9.35% increase since the beginning of the year, while the Blue Chip-10 index saw a similar rise. According to Tradingview data, Ethereum increased by 2.2% in the same period.
Animoca Brands founder Yat Siu, in an interview during Taiwan Blockchain Week, pointed to the newly discovered maturity and diversity of the NFT space as one reason for the recovery of NFT prices from the lowest levels of the 2022-2023 crypto winter. Yat Siu made the following statement:
“Most of the speculators in the NFT and GameFi space have left, which has strengthened the foundation because the remaining people are truly interested.”
Notable Data on the NFT Market
The gains in January are noteworthy, and the reason seems to be that NFT prices initially could not keep up with the cryptocurrency’s year-end progress. However, investors seem to have changed their minds as the search for utility or real-world use in this area continues.
According to data from blockchain data analytics platform CryptoSlam, the average price of an NFT fell by 13% to $107, yet the uptrend continues. The number of transactions in the NFT space increased by 30%, while the sales volume decreased by 36% to $1.1 billion. Other CryptoSlam data indicates that wash trading, a form of market manipulation where a buyer and seller make a secret agreement to create the appearance of demand, accounts for 39% of the total volume.
Recently, hype on other blockchain networks, especially Solana, has led to a decrease in NFT transactions on the Ethereum network. The high transaction fees compared to other networks continue to leave Ethereum behind in this area. Additionally, frequent airdrop events on other networks are causing users to turn to different platforms.
