NFTs Pull In Close To $1 Billion In January Thanks To Crypto Resurgence

Updated: 05 February 2023

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January was a good month for non-fungible tokens (NFTs), seeing the digital collectibles surge in trading volume as the broader cryptocurrency market mounted a recovery from a prolonged bear market.

The news comes in light of new data from market intelligence platform DappRadar, which showed that NFT sales leaped 38% higher month after month to record a total of $946 million in January 2023. Notably, this was the highest trading volume recorded since June last year.

The market intelligence platform also established that NFT sales skyrocketed by 42% between December and January. An excerpt from the report said:

The NFT market is recovering with the surge of NFT trading volumes and sales counts in January 2023. The NFT trading volume recorded a 38% increase from the previous month, reaching $946 million. This is the highest trading volume recorded since June 2022. The sales count of NFTs also increased by 42% from the previous month, reaching 9.2 million.

Source: DappRadar

In the report, DappRadar also highlights that the industry’s decentralized finance (DeFi) sector is also recovering momentum and strength as the total value locked (TVL) on DeFi has soared 26.8% between December and January. A paragraph in the report reads:

The DeFi market showed signs of recovery in January 2023 as the [TVL] increased by 26.82%, reaching $74.6 billion from the previous month. While this metric has greatly benefited from the rally in crypto prices, other on-chain indicators signal a bull trend.

Source: DappRadar

NFTs, which offer proof of ownership of digital assets such as online artwork, skyrocketed in popularity in 2021, recording sales as high as $69 million for digital art pieces by Beeple. Two large NFT art collections, including CryptoPunks and the Bored Ape Yacht Club, also increased in popularity the same year.

In an email to MarketWatch, a blockchain analyst at DappRadar, Sara Gherghelas, attributed January’s surge in the NFT market to the success of Yuga Labs’ NFT collections, which accounted for 34.3% of the total NFT trading volume with a trading volume of $324.8 million.

Yuga Labs are the creative team behind the Bored Ape Yacht Club, a 10,000-piece collection that features cartoon apes. The project raised $450 million in March 2022, which was used to establish a media empire valued at $4 billion. Among the holders are Justin Bieber, Jimmy Fallon, and Serena Williams, among other prominent figures.

Yuga Labs launched a product dubbed “the Sewer Pass access pass” in January, granting holders access to an exclusive online game. In a statement, Gherghelas noted that the release of the Sewer Pass collection also generated “a lot of excitement in the NFT world,” which, according to her, explains why the trading volume was up.

Another factor that played a role in the high NFT trading volume in January was the anticipation of a popular token created by NFT marketplace Blur and a launch slated for launch on February 14. Citing Gherghelas, the token “motivated users to be more involved in NFT trading, to have higher returns.”

Over time, the Blur marketplace has gained popularity and fame, becoming one of the fastest-growing NFT marketplaces with a trading volume of $187 million. This represents 20% of the market and comes despite Blur being a new entrant into the space.

OpenSea Remains The Leading NFT Marketplace DappRadar

In the same report, DappRadar says OpenSea is still the number one NFT marketplace, with a 66.58% increase in trading volume last month, reaching $495 million. This represents 58% of the total trading volume of the entire NFT marketplace. NFT blockchain Ethereum also holds a dominance of 78.5% of the market.

Lido Overtakes MakerDAO: DappRadar

The analytics platform records critical statistics about liquidity provider Lido Finance and Ethereum (ETH), the leading smart contract platform further down in the report. DappRadar uses these as more evidence of the recovering DeFi sector.

According to the market intelligence platform, Lido is ahead of Maker DAO, the creators of DAI stablecoin, becoming the largest decentralized finance protocol. The surpassing is attributed to the growing popularity of liquid staking protocols resulting from Ethereum’s move to switch from a proof-of-work (PoW) consensus to a proof-of-stake (PoS) mechanism in September. It noted:

Lido Finance has become the largest DeFi protocol by toppling Maker DAO this month. This has been largely driven by the growing popularity of liquid staking derivative (LSD) protocols, with Ether up by a significant 33% over the past 30 days.

Ethereum’s transition to PoS has acted as a catalyst, fueling a growing interest in liquid staking derivatives. Lido was quick to take advantage of this, with its fee revenue being directly proportional to the earnings of Ethereum’s PoS. This comes as it sends received ETH to the staking protocol.