Our NFT Market Report Q1 2022 is published

Following the publication of our annual performance report of the 2021 NFT market, 2022 starts with a more complex global-political context than ever.

besancia ·  · 04/28/22 ·  4 min

The NFT market experienced strong euphoria in 2021, mainly driven by the Collectibles segment. But at the end of the year, the various volumes began to decline and this trend continued in the first quarter of 2022. This is explained in particular by a rather complex geopolitical context but not only.

  • How has the war in Ukraine affected the NFT market?
  • What were the trends that marked this first quarter?
  • Is the NFT market dead?

Quarterly NFT Market Report Q1 2022 – Summary

With 54 pages dedicated to the analysis of the NFT market for the first quarter of 2022, here is the summary of the different chapters that you can find there:

1 – The fundamentals

  • What is an NFT?
  • The data used for this report
  • Legal disclaimer

2 – A look back at Q1

3 – Overall performance

  • Q1 2022 Performance

4 – Detailed performance

  • Search volume
  • Performance by segment
  • Market distribution by project
  • Primary and Secondary Market
  • Average NFT Price Evolution
  • Active Wallets
  • Supply & Liquidity

5 – The interview of the quarter

  • Shaban Shaame from EverDreamSoft

6 – Profits & losses on the market

  • Global performance of NFT Trading
  • Profit & Loss per segment over time
  • Most profitable projects
  • More profitables sales

7 – Focus by segment

  • Art
  • Collectibles
  • Gaming
  • Metaverses
  • Utilities

8 – General conclusions

This article will introduce you to different metrics but we invite you to download the full report for free to have the most detailed overview possible!

How the NFT Market reacted to the Ukraine war

Google trends NFTs Ukraine Q1 2022
Search volume around “Non Fungible Tokens” & “Ukraine” Topics. Source: Google Trends

One of the most significant events of this first quarter is the war in Ukraine. This is probably what has marked the biggest brake in the industry as we can see on this Google Trends search chart.

With the media oversaturating on the subject towards the end of the year, it was natural for the interest to drop. Another important factor is the Fed’s announcements at the beginning of the year regarding the slowdown in “anti-covid” financial measures. 

Global NFT performance

Global NFT Performance Q1 2022
Global NFT Performance Q1 2022

Overall, the indicators are bearish. As we announced in our 2021 annual report, a decrease in NFT sales volume due to the saturation of the collectible market was to be expected. Many projects, such as Profile Picture (PFP) with a 10,000 asset supply have declined sharply to make way for projects with less supply.

However, this drop in sales volume is accompanied by a much smaller drop in the volume of dollars traded (only 5% drop).

Although the number of active wallets is also decreasing, the number of buyers is still higher than the number of sellers which means that the interest in buying NFT is still present.

With nearly $8 billion traded in the first quarter of 2022, the market cannot really be considered to have collapsed. We are observing a stabilization of the NFT market, in line with the last quarter of 2021.

However, two indicators are on the rise:

  • The number of smart contracts increased by 10.46%, from 1,271 in Q4 2021 to 1,404 in Q1 2022
  • The average price of non-fungible tokens  increased by 80%, from $587 in Q4 2021 to $1,057 in Q1 2022

The increase in the number of smart contracts means an increase in the number of projects that are created and are active. The builders of web3 are still present, and their number is increasing. The average price of NFTs was driven by sales of “bluechips” projects such as Bored Ape Yacht Club, CryptoPunks, Azuki or Cyberbrokers.

Find more advanced metrics in our report !

Primary and secondary NFT Market

Sales USD number NFT sales Q1 2022
Volume of sales and dollars traded. NFT Primary market and Secondary market (Q1 2022)

The secondary market represents almost 90% of the value in circulation for approximately 70% of the sales volume.

As a reminder, the secondary market in 2021 represented:

  • 47% of transactions
  • 82% of the value traded

We observe here a very clear decline in the primary market, which is explained by a (healthy) slowdown in the production of assets on the market. The frenzy of new NFTs seems to have slowed and most of the value remains in the secondary market.

This trend gives the feeling that the secondary market is still trying to “digest” all the NFTs that were issued in the primary market last year. We are in a post-saturation phase of the market, which helps to explain this slowdown.

Find more advanced metrics in our report !

NFT Activity by segment

NFT segment activity Q1 2022
Breakdown of NFT activity by segment

Several conclusions emerge from these charts:

  • Collectibles represent a larger share than ever in the NFTs markets with nearly 80% of the total volume traded. 
  • Blockchain Gaming remains a major segment in the number of sales and active wallets. However, this segment is dominated by Axie Infinity.
  • The Metaverses, although over-hyped, currently represent only a minor part of the overall NFT industry.

However, each segment has its own interpretation. It’s normal to have a high asset supply for video games but a low one for Metaverse.  Art is not intended to present the same liquidity as the Collectibles segment.

The NFT market is stabilizing

The great novelty of this quarter is undoubtedly the evolution of profitability in the NFT markets. Making a profit in NFTs in 2022 won’t be as easy as 2021. That said, we can stay optimistic about the future of the NFT industry.

Yes, the asset, USD and active wallet volume decreased compared to the Q4 2021. But compared to the Q1 2021, volume is still very encouraging! Remember that this market was built after the initial coin offering (ICO) period of 2017 and therefore, is very resilient to the crypto-market volatility. 

Those who entered the NFT industry in 2021 and hoped that the hyper-growth to continue at the same pace must have some mixed feelings about this industry. However, we truly believe that we’re living the opening of a new chapter. What will it be? Presumably something around the construction of bigger, more ambitious NFT projects and new experiments.

#NFT Quarterly Report
#NFT Reports

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