Data indicates the latest crypto boom could be entering a slower period
The market for non-fungible tokens, or NFTs, may slow down after NFT activity grew strongly in 2021 and into the new year.
The health of the NFT market is itself a fascinating data project. The historical volatility of the price of crypto tokens and other blockchain-based assets is high, meaning you might be fooled into calling a trend early, only for the markets to reverse and look stupid. show.
In the crypto world, it is wise to never say never.
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And yet we are happy to highlight a number of data points that indicate that the NFT market is slowing along a number of axes, indicating at the very least that growth in the hot sector has stalled. This is not just an academic point; there are plenty of startups in the NFT space, meaning there is an ocean of venture capital and illiquid private market shares floating in projects directly or indirectly related to non-fungible token demand.
The starting point is, of course, what we care about most, and there are more players in the space than just OpenSea.
So let’s comb through the data from the Dune platform — more about that company and its recent fundraising below — and other sources to get a handle on NFT activity. We’ll also echo Coinbase’s NFT comments from its latest earnings call and try to draw a conclusion about where the NFT market is today — and what that means for tech startups hoping to surf unique blockchain assets all the way to the public markets.
What does the data say?
Looking at the NFT volume, the leading indicator is OpenSea. The well-funded unicorn startup has proven to be an early leader in the NFT market, with an impressive market share. So if we look at OpenSea data, it can give us a strong, if imperfect, indication of where the NFT market itself is.
We rely largely on Dune data these days. Dune is also a unicorn startup, raising a $69.42 million round earlier this year. That funding event gave Dune a $1 billion valuation. Basically, Dune is a blockchain data analytics platform that offers both free services and paid accounts. It has become known in the crypto community due to the depth of the data, as well as the fact that the information can be easily accessed and stored in publicly available dashboards created by the community.
One such dashboard was put together by Richard Chen, an investor at crypto venture group 1confirmation, which focuses on OpenSea data, giving us a glimpse into the platform’s volume. For example, note the following: