An article by the WSJ suggests the non-fungible token (NFT) market is “collapsing”. However, this news doesn’t show the full picture as contrasting analysis reveals a consolidation is instead taking place.
An article in the Wall Street Journal has claimed sales of non-fungible tokens (NFTs) are “flatlining” —. According to the article it’s happening in the same week that the top five collections alone accounted for more than $1 billion in primary and secondary sales.
The article cited data from the NFT market analysis platform Nonfungible suggesting the number of NFT sales has fallen by 92% since an all-time high in September 2021. Wallets active in the Ethereum (ETH) NFT market were also said to have declined by 88% since a high in November 2021.
“The NFT market is collapsing,” the article concluded.
However, on-chain data from Dune Analytics’ dashboard suggest that the NFT market is still robust. The information shows that NFT users and transactions are much higher than what’s reported by Nonfungible.
NFT market is Emerging
Sub-sectors within the NFT market are emerging and some areas of the oversaturated market are in a downturn. However, others are seeing major gains.
Nansen’s analytics platform which indexes NFT collections by type shows that “Blue Chip” NFTs — established and highly prized brands such as the Bored and Mutant Ape Yacht Club and Azuki tokens — are far outperforming art or gaming tokens.
The Nansen Blue Chip-10 Index tracking the top 10 NFT projects is up 81% year to date (YTD). Also, the indexes tracking the top art and gaming NFT collections are respectively down 39% and 49% YTD.
This phenomenon of NFT capital consolidating into the top collections was pointing out in an analysis by NFTstatistics.eth. It all shared a chart in late April showing the top 5 collections are driving the Ethereum.