A drop in prices of digital assets does not necessarily affect the performance of non-fungible tokens (NFTs) as they continue to soar despite crypto slumps, according to distributed app (dapp) store DappRadar.
For instance, during the third quarter of 2021, when the crypto market was struggling to recover the losses of the second quarter, the market for NFTs was booming, generating USD 10.7bn in trades. Likewise, in Q4, as digital assets were on a roller coaster, NFTs continued their upward movement, processing USD 11.9bn in trading volume.
“NFTs were hardly affected by the dip in cryptocurrencies,” the report said, adding that “despite the volatile cryptocurrencies cycles, NFTs maintain a stagnant positive trend.”
So far this year, the crypto market has seen turbulent fluctuations in the prices of the top cryptocurrencies. On the other hand, NFTs have marked a strong beginning, partly attributed to the launch of LooksRare NFT marketplace, which rose as a rival to the major marketplace OpenSea.
DappRadar noted that both the number of trades and the number of unique active wallets (UAWs) connected to NFT dapps have been constantly increasing. Since December 2021, an average of 46,800 UAWs have connected to Ethereum (ETH) NFT dapps, representing a growth of 43% compared to the number seen in the third quarter of 2021.
“The undeniable role that NFTs play in both the metaverse and the play-to-earn narratives has primarily contributed to positive on-chain metrics despite unfavorable macro indicators,” DappRadar said, adding that celebrities and big brands entering the space have further strengthened the space’s growth.
Moreover, the report said that the increasing attention and investment in the upcoming metaverse only favors NFTs. Over the course of 2021, a number of top tech companies, including Meta (previously Facebook) and crypto exchange KuCoin, devoted millions of dollars to the development of the metaverse.
“As the outlook for this type of asset is undeniably powerful, individuals might see the negative cryptocurrency trend as a buying opportunity, as the value for the underlying asset, in this case, the ether, decreases the actual price of the NFT,” the report said.
When it comes to NFTs as collectibles, the report found America to be “still the most active region,” with the United States leading DappRadar NFT traffic “by far.” It’s followed by the Philippines, Brazil, and Mexico.
As reported, Activate Consulting, a management consulting firm, expects NFTs to become mainstream by 2022. In its 2022 tech and media outlook, the firm claimed that every technology and media company would need to adopt this innovation.