NFTs Now Form the Bulk of Ethereum Transactions
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NFTs Now Form the Bulk of Ethereum Transactions

NFTs continue to buck the trend despite the current market downturn.
Neither the author, Kingsley Alo, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

On-chain data provided by Coinmetrics has revealed that non-fungible tokens (NFTs) share of transfer is the highest on the Ethereum network. NFTs, now with new use cases within the industry, have seen their number of transactions surpass other major ERC-20 tokens, including stablecoins.

Source: Coinmetrics

NFTs March On Despite the General Market Downturn

The current performance of NFTs is impressive considering the general slump in the crypto market, the rampant wash trading, and the recent OpenSea hack. Despite these prevailing conditions, the crypto sub-sector has continued to gain popularity amongst investors, reinforcing its asset class status.

Current global macro winds, including the Feds interest rate hike, the Russia-Ukraine crisis, and Canada’s civil unrest, have caused investors to lose interest in the market.  This loss of interest is seen in the volume collapse of #buythedip mentions across social media. 

This loss of interest is further substantiated by data from Glassnode, which shows that the crypto market may be in a bear trend. Against this backdrop, NFTs have outperformed the larger crypto market.

Also, rampant wash trading on the LooksRare marketplace and a recent phishing attack on OpenSea has not deterred NFTs. Last weekend, OpenSea was targeted by attackers who stole millions of dollars worth of NFTs over a few hours. It temporarily threw the entire NFT space into disarray.

Devin Finzer announced via a Twitter thread that the over $13 billion company was investigating the hack after the attack. He further allayed fears that the attack was connected to the platform’s website. He alleges that the affected users signed a malicious payload from an attacker and inadvertently allowed the theft of their NFTs. He allayed fears that the attack was connected to the platform’s website.

However, the immediate aftermath of the attack saw NFT transactions barely slow down. According to Coinmetrics, the volume of ERC-721 transfers fell to 284k before rebounding back to near all-time highs.

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NFTs Decoupling From the General Crypto Market in 2022

A glance at Coinmarketcap’s list of NFT collection affirms the notion that the crypto subset is immune to the general downtrend. Five of the top ten collections listed have had at least a 30% increase in sales volume over the last 24 hours. Of the top three, the X- metaverse -box and seascape zombies vs humans collections have increased over 5500% and 1500%, respectively.

The data is even more impressive over the last thirty days, with the average price of the top 10 collections increasing significantly.

This could be an indication that NFTs are beginning to gain widespread adoption and mainstream applications by some global brands. This popularity has now seen it become an independent asset class that is not heavily affected by broader market sentiments.

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Do you think NFTs have become an independent asset class? Let us know your thoughts in the comments below?