NFT Buyers Unswoon in June
Despite falling prices, NFT users are still in the game.
Buyers returned to the market for non-fungible tokens (NFT) in June, although prices increased the decline, shows a new report from the blockchain analysis firm Nansen, which indicates that the intangible benefits of art ownership as well as its status as an alternative investment boost which are absent from cryptocurrencies.
After a series of NFT events and conferences over the past month, Nansen’s Q2 NFT report found that monthly returning buyers of NFTs on Ethereum
The company reviewed six indices of NFT collections of NFTs denominated in ETH that are representative of market trends.
The six meters – NFT-500, Blue Chip-10, Social-100, Game-50, Art-20 and Metaverse-20 – saw significant declines in Q2 from the first three months of 2022. Nansen’s Gaming Index fell the most, 59 , 6% from the beginning of the year. The NFT-500 index saw a decline in membership, with only 310 collections meeting the liquidity requirements to participate.
« “Such a phenomenon suggests the risk-off attitude among NFT market participants.”
This cautious sentiment suggests that investors focus on capital preservation instead of taking risks in the hope of gains. The report points to limited liquidity in the NFT market as a sign that June’s participant trend may not be sustained.
An earlier report from the company found that different cryptocurrencies, which are mainly fungible tokens, move more in step with each other than they do with NFTs. Nevertheless, the growth in users points to a bigger question – why buy NFTs in the first place?
“Prominent causes include social motivations such as perceived online identity, inclusion and a sense of solidarity,” says Choe. “Such motivations prevail despite a market downturn, thus keeping market participants engaged.”
The largest gain was the Art-20 index, up 33.1% in June and 35% for the year. Generative art collections such as Chromie Squiggle and The Currency in particular topped the charts with a total market value of $ 202,000.
Generative art accounted for 92% of the market value of art NFTs, up from 89.5% at the end of the first quarter. In contrast to digital art, it describes generative works that have been created in whole or in part using computer systems that include random elements. Generative art projects will often vary in color, but stay relatively even in shape. Autoglyphys, the first Ethereum-based generative art collection, currently has a price floor of 299.95 ETH, according to the NFT Price Floor.
The Nansen Art-20 index was also the least volatile index in the second quarter, pointing to its comparative strength within the measured indices.
“Historical analysis reported that the art market tends to lag behind the broad market. Art prices also tend to fall less than the stock market,” Choe adds. “
It is important to note that the report only tracked NFT collections based on the Ethereum blockchain. While Ethereum-based NFTs accounted for 82.2% of the NFT volume traded in June, NFT collections also exist in Solana
