NFT Buyers Unswoon In June

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NFT Buyers Unswoon In June

Buyers returned to the non-fungible token (NFT) market in June as an intangible benefit and alternative investment in art ownership, despite widening prices, according to a new report from blockchain analysis firm Nansen. Shows that the status of the cryptocurrency is not in the lift.

Following a series of NFT events and meetings last month, Nansen’s second-quarter NFT report found monthly repeaters of NFTs in Ethereum.
ETH
Blockchain bounced back to 45,000 In June after seeing less than 35,000 May. Nansen also acknowledges a series of free casting events, also known as Air Drops, as a reason for the increased activity. AirDrops are often used in new collections as a way to reach the first consumer and build a user base.

The company has reviewed six indexes on the NFT collection of ETH-denominated NFTs that represent market trends.

The six gauges (NFT-500, Blue Chip-10, Social-100, Game-50, Art-20, Metaverse-20) dropped significantly from the first three months of 2022 to the second quarter. Nansen’s game index fell the most at 59.6. % From the beginning of the year. In the NFT-500 index, membership was reduced and the only collection that met the liquidity requirements to participate was the 310 collection.

“One of the reasons for this is that the inflow and circulation of ETH is concentrated in the NFTs of good or large caps within the NFT market,” said Louisa Choe, a research analyst at Nansen. “This phenomenon suggests the risk-off attitude of NFT market participants.”

This cautious sentiment shows that investors are focusing on capital conservation rather than taking risks in the hope of profit. The report points out that the liquidity of the NFT market is limited as a sign that the upward trend of participants in June may not be sustained.

According to previous reports by the company, various cryptocurrencies, which are essentially substitutable tokens, move in step with each other rather than NFTs. Still, the increase in users shows a bigger problem – why buy NFTs in the first place?

“Notable reasons include social motivations such as awareness of online identity, inclusion, and a sense of solidarity,” says Choe. “Such motives dominate despite the market downturn, thereby maintaining the involvement of market participants.”

The largest increase was in the Art-20 index, which rose 33.1% in June and 35% annually. Generative art collections such as Chromie Squiggle and The Currency have hit the charts with a market capitalization of $ 202,000.

Generative art accounted for 92% of Art NFT’s market capitalization, up from 89.5% at the end of the first quarter. Unlike digital art, generative art represents a work created in whole or in part using a computer system that contains elements of chance. Generative art projects often have different colors, but the shape is relatively uniform. According to NFT minimum rates, Autoglyphys, the first Ethereum-based generative art collection, currently holds a minimum rate of 299.95 ETH.

The Nansen Art-20 Index is also the least volatile index in the second quarter, showing comparative strength within the measured index.

“Historical analysis shows that the art market tends to lag behind a wide range of markets. Art prices usually do not fall below the stock market,” Choe adds. “ArtNFT’s valuation suggests market participants looking for alternative assets as a means of diversifying their portfolio.”

It is important to note that the report only tracks NFT collections based on the Ethereum blockchain.Ethereum-based NFTs accounted for 82.2% of the NFT volumes traded in June, but the NFT collection also exists within Solana.
Sol
,polygon
MATIC
And alternatives to other Ethereum blockchains.

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