Almost every market correction in the crypto industry comes with a shining light. A new life-saver usually emerges to save the faltering assets from further depreciation. This time, NFTs are the new life-savers.
The latest fund performance metrics from Bitwise show that, amidst the entire crypto market instability occasioned by price fluctuations, NFTs are holding their own in the ongoing market storm.
Pressure Abounds in the Crypto Market
The beginning of April comes with a noticeable price downtrend for the cryptocurrency market. The total market capitalization has shed some $448 billion from the previous local top of $2.1 trillion throughout the period.
Industry analysts point to broader macroeconomic problems as the main factors contributing to continuous market underperformance. Additionally, sentiment from investors has been flipping toward risk prevention when the market requires active participation to arrest the problems.
The $1.6 billion support level has been strong enough for the crypto industry with periodic bounces since February. The 5% upswing is the latest recovery, which occurred on the last day of April 2022.
However, when the total crypto market capitalization is considered, there is a 43% decline in November 2021 from its all-time high of May. The future outlook appears to be grim.
According to the CEO of Bitwise, Hunter Horsley, the performance figures of some funds that his company is managing have recorded a negative 53% loss.
Meanwhile, the most surprising recent development is that the Bitwise platform’s NFT index, which comprises most of the NFT collections, is in green. The new product has been a revelation because it is hard to imagine NFTs saving investors’ portfolios in an unstable market situation.
Are NFTs Just Pointless JPEGs?
It is generally known that non-fungible tokens serve more diverse uses than a mere store of digital artwork. Still, the argument about their use in the broader sense elicits other rounds of never-ending debate.
Bloomberg’s recent article outlines the need for a somewhat cooling NFT market after pointing out that the average selling price for NFTs has declined considerably from $6,900 as of January 2 to roughly $2,000 at the beginning of March.
Additionally, the daily average sales have also declined, from a high of $160.2 million in January to $26.2 million in March 2022.
However, this pattern does not reflect what happens in the top-tier of NFT collectibles. The Bored Ape Yacht Club (BAYC), considered the top-performing NFT, has a current trading price of 114.3 ETH, approximately $325,000 in fiat. Further analysis of the price-performance shows another decline at the start of May. But throughout the current year, the average selling price of the BAYC has been on an upward trend.
The data indicates the split in the market between the top-tier NFT collections and the bottom-tier collections, which points to possibly positive performance for the top-tiered NFTs.
Experts believe that the NFTs could be on the verge of becoming the next portfolio savers for the digital currency industry.