- The 2022 NFT winter led to a $5.6 billion drop in the valuation of the Ethereum NFT market
- The plummeting ETH price is to blame for low NFT valuations
- Yuga Labs produced accounted for close to 50% of the Ethereum NFT market
The 2022 crypto winter spilled over to the collectibles space causing the Ethereum NFT market to lose over $5 billion in value in 2022. According to a new report by DappRadar, the loss was caused by plummeting ETH price witnessed last year and which was accelerated by the Terra saga among other controversies. The report also revealed that Yuga Labs products like the Bored Ape Yacht club (BAYC) controlled almost half of the NFT volume on Ethereum within the same period.
The Terra Saga and a 60% Drop
According to DappRadar, the Ethereum collectibles market started the year at a valuation of slightly above $9 billion which later dropped by more than 59% to $3.7 billion by the end of the year. The drop coincided with Ethereum’s native crypto, ETH, shedding 60% of its value.
The Terra saga in May deflated a market that was struggling to maintain the steam from the previous year leading to an 80% decline in the value of Ethereum NFTs. The FTX crash in November aggravated the situation, bringing the Ethereum NFT valuation to slightly above $2 billion with a recovery attempt bringing the amount to $3.7 billion by year-end.
Yuga Labs Controls the Market
The report disclosed that the Bored Ape and CryptoPunks collections from Yuga Labs held close to 50% (46.7%) of the ETH-based NFT market in 2022. Azuki NFTs were among collections outside Yuga’s umbrella that recorded notable growth in valuation last year.
NFT projects launched after the Terra menace registered significant market cap growth compared to those launched before the controversy. With the Bitcoin and Solana NFT markets gaining momentum, it’s yet to be seen whether the Ethereum NFT market will record significant growth in 2023.
