NFTs Q4’21: State of the Market and 2022 Predictions

NFT Market Macro View

OS monthly volume surges in 2nd half of 2021
OS daily volumes in USD
Register users who transact on OS hits 723k at end of November

Blue Chip PFPs

Nansen’s Blue Chip Index for past 3 months shows decreasing marketcap
Current blue chip prices vs all time highs (in ETH)
Of the 16 top monthly projects by volume in November, 8 are new
Art Blocks volume peaks in August and crashes
Notable Art Blocks Floors compared to all time high as of 11/30/21

CryptoArt (SuperRare)

SuperRare dominating market share, and hits ATH in October

Conclusion and Predictions

Looking at the blue chip marketcap in USD terms tells a different story than just ETH
“NFTs” search interest on google reaching all time highs
  1. What happens to NFTs if ETH goes to $10k?
  • Historically NFTs underperform when ETH rips up or down, and overperforms when ETH is stable. I think a lot of NFT-sphere thinks ETH is going to rip up to $10k, and thus I think legacy NFT traders sit on sidelines until ETH price action levels out.
  • Preditcion: We will see continued bleeding in most blue chips for near future as most legacy traders sit out, which combined with potential tax loss harvesting, makes for a rough December. With that said, I do expect to see a rebound once ETH stabilizes; but a lot depends on the answer to the next question.
  • Recent data is showing us that new NFT money buys new projects, not the old ones. This is evidenced by the late November OpenSea daily volume data — daily volume is fine and not far from peak level, but the blue chips are still down. This is because the money is going elsewhere.
  • Prediction: The average new coinbase NFT trader isn’t coming to buy the legacy blue chips — they’re likely going to chase the hot new PFP drop of the day. And they’re going to have some nice projects to choose from, as we’re seeing big players and artists enter this PFP space with new project drops (Seerlight, RTFKT and Hackatao). New drops will do well, but less likely for legacy blue chips.
  • This may be the hottest question in the NFT space right now. We have recently seen the craze that Wolf Game and its $WOOL token created in just a few short weeks. Passive income from NFTs and Defi/NFT mechanics are absolutely the rage right now.
  • Prediction: Tokenization will be hotter than ever, and will be the driver of the next leg up for those blue chips which utilize them (Punks Comic / MetaHeroes, CoolCats, and most notably Bored Apes). Tokens also create a more natural entry for the huge crypto-native user base to play in this space, which is a bigger user base than the NFT trader base by orders of magnitude, and will add to liquidity substantially.
  • There has been increasing chatter around NFT funds being spun up in Q4 (though we haven’t seen too many big entrances yet). But sentiment remains that they’re coming. And after the splash that ConstitutionDAO made, new chatter about PunksDAO, and the early success of DAOs like FingerPrints, Flamingo and PleasrDAO, I believe we’ll see a year of explosive DAO growth.
  • Prediction: Funds and DAOs will be the wildcard for 2022. Given their backing likely coming from more of the legacy/OG traders, this DAO-led market action will be one of the biggest blue chip drivers in 2022 (vs new traders and new money).

--

--

--

Web3, Crypto, NFT enthusiast. Consultant by trade. Trying to predict the future...

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

My thoughts on Bitcoin

Parastate — the Bridge ETH & POLKADOT!

SONAR: A FIRST CLASS CRYPTOCURRENCY ALERT SYSTEM

Social Tokens: The New Wave

Why We’re Putting Sports Cards on the Blockchain

Complete Guide on Pre-sale Usogui Network

Important Distinctions Between NFTs and Pyramid Schemes

Notice of re-allocating Mars machines

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Tyler D Warner

Tyler D Warner

Web3, Crypto, NFT enthusiast. Consultant by trade. Trying to predict the future...

More from Medium

Late Bloomer Crypto: NFT Guide

How Non-Fungible Tokens are Changing the Way We Earn Money

5 Metaverse Projects To Keep Your Eyes On In 2022!

What is Web3?

WTF is Web3 Cover Image