Following the rise of the Defy market in the summer of 2020, this year it was the turn of the NFT. The news of the sale of an unparalleled token by an artist named Bipple worth $ 69 million in early 2021 caused a great deal of controversy in the digital currency market and attracted all eyes. As the uproar over this controversial news and the relative stability of the market in the short term subsided, we saw the resurgence of NFTs and the welcome of investors from this market, which became known as the summer of NFTs.
If you are interested in the NFT market, you must be familiar with the name of the OpenSea trading platform. With the peak of the market for buying and selling unique tokens, the open platform did not miss this success and was able to reach a significant income. In 2021, Openness alone raised $ 123 million in two phases, boosting the market value of unique tokens by $ 1.5 billion.
The attractiveness of this field and the extraordinary performance of Openness, capital management funds and well-known and reputable personal investors such as Anderson Horowitz (a16z), Coinbase Venture, Funders Fund, Mark Koban and Coin Durant (Coin D) To be encouraged to support this platform and use their credit to grow this market.
To better understand how successful the OpenStation platform has been, consider the platform’s one-year growth since August 2020, when it had a market value of only $ 1 million and, in less than a year, was able to The past recorded a market value of $ 3.4 billion.
Is the NFT market in turmoil?
Following the record for most tokens trading in their most active trading month to date, the price of popular NFTs such as CryptoPunks or Bored Apes Yacht Club has dropped by about 30% from its highest level. Using NFTX indicators, we can see how tokens such as Cryptopanx have fallen in price by less than $ 120,000 in less than a week, given the lowest selling price per token, commonly referred to as the floor price.
The downtrend also affected the price of ether, falling 45 percent from its four-month high of $ 3,800. Of course, cryptocurrency tokens traded still tripled compared to their monthly estimate.
By taking a deeper look at in-chain data, we can gain a better understanding of what is happening in the NFT market. For example, useful information on high-volume transactions in trading markets can provide valuable insights into the reasons for the recent fall in cryptocurrency prices. The High Volume Transaction Index typically tracks data on trades above $ 100,000, which is mainly done by whales or institutional investment companies.
An examination of this index shows that investors have sold unparalleled tokens at price ceilings, and with their profits, the market has naturally reacted and we have seen a reduction in prices. At the same time, the volume of daily transactions on the open platform also declined, which temporarily indicates a decrease in interest among traders to enter the market. Transactions in the Rarible and SuperRare markets also fell by an average of 30 percent per week.
Of course, all this is not a reason for the permanent disappearance of investors’ interest in this market, but due to the nature of trading markets and market cycles, we are already in the phase of stabilizing prices and filling price gaps.
Total sales on the open platform resumed to $ 113 million after a long downturn. The daily interaction rate of active users has increased by 11.59% in proportion to the growth of trading volume.
Relationship between NFT prices and Ethereum network fees
With the increasing popularity of investors and their influx into the trading market of unique tokens, the cost of fees in the Ethereum network will subsequently increase.
The more tokens from different projects are generated on the Ethereum blockchain platform, the higher the transaction cost for their approval will naturally be. This is due to the higher energy required to validate smart contracts that are created on the network and require more power for their approval by miners. Due to the costs incurred by NFT manufacturers, they are trying to generate more tokens so that they can cover the cost of transactions with more sales.
The influx of people interested in creating and selling NFTs is directly related to the rising price of Ethereum. Ether holders are the first to be happy about this. In addition to the increasing demand for ether to pay for commissions, the process of burning part of the commissions is another factor in raising the price of ether. Together, these two issues will satisfy the ether holders.
The high volume of NFT-related transactions has caused the amount of ether out of the cycle to exceed its supply in the network and greatly reduce the ether emission rate. This process plays a positive role in ether anti-inflation policy.
Just as last year saw the emergence of the emerging phenomenon that fascinated Defy and opened a new and promising perspective in the Blockchain and digital currencies for all those interested in this world, 2021 was a year of surprise and a new window to the unlimited horizon of digital currencies. opened. There are still many pros and cons to this market. Many questions remain unanswered and we will have to wait for the field to mature and make the use of unique tokens in the world of the Blockchain tangible to us.
The NFT market is very large and exciting and has high earning potential. This issue has made only the passage of time its unlimited capacity clear to everyone and pave the way for gaining the necessary knowledge to use all the features available in this market. What is clear is that whales and institutional investors continue to welcome new and future projects. Blockchain gaming platforms and games are another exciting and exciting world that can simultaneously dominate the future of the entertainment and revenue-generating industry.