On February 9th, DappRadar published a report showing that the Ethereum NFT market cap value fell by 59.60% from $9.3 billion in 2022 to around $3.7 billion in early 2023.
DappRadar’s study is based on the marketcap analysis of 81 of the largest NFT collections running on the Ethereum network.
2/ The market cap for 81 Ethereum collections analyzed by our machine-learning algorithm experienced a decrease of 59.60% in USD value, from $9.3B in the beginning of 2022 to $3.7B at the end of the year. 📉
— DappRadar (@DappRadar) February 9, 2023
According to DappRadar the collapse of Terra Luna in May 2022 was the main cause of the 88% market cap loss of NFT projects running on Ethereum by June 2022.
Therefore, the drop in the market cap of NFT projects was not due to a lack of interest on the part of investors but to the manipulations of bad actors in the ecosystem. This is probably the main cause of the broader collapse of the crypto industry, as during the collapse of FTX, the market cap of the entire NFT ecosystem crashed following the global crypto market.
These Were The Highest Earning NFT Collections On Ethereum Since 2022
The report noted that some projects launched during 2021 and early 2022 had “significant market cap growth” of up to 260%. Among those projects were the Azuki, Pudgy Penguins and Degen Toonz collections, whose market cap appreciated by 113.89%, 260%, and 204%, respectively.
Among the newer NFT projects, which were launched after the collapse of Terra Luna are: The Potatoz with a market cap growth of 134.68%, Renga with 211.63%, DigiDaigaku with 209.88%, and God Hates NFT with 1,653.28%.
It is worth mentioning that all of these projects managed to see dramatic growth, despite the fact that ETH, the native currency of the Ethereum network, saw a 60% price drop over the last year due to the bear market.
Bored Ape Yacht Club Dominates The Market
According to DappRadar, Yuga Labs, the parent company of the Bored Ape Yacht Club project, dominated the Ethereum network’s NFT market, “establishing itself as a leading player in the NFT industry”, despite the exponential fall of other projects.
Despite Yuga Labs’ collection accounting for 67% of the total value of the NFT market on Ethereum, Bored Ape Yacht Club’s market capitalization saw a 64.92% depreciation falling from $2.6bn to $934m by the end of 2022.
However, that didn’t stop Yuga Labs from buying two of the largest NFT collections on the market, CryptoPunks and Meebits, for an undisclosed sum to date. Both collections are already seeing a significant rebound after suffering declines of up to 60% in 2022.
But now that the crypto market is showing signs of a recovery, probably the NFT ecosystem has some chance to breathe. And we might be seeing green pastures ahead as just recently, trading activity around blue-chip collections started to spike, and now there are even NFTs taking over the Bitcoin network.