How a Price Battle Between Two Heavyweight NFT Exchanges is Pumping Prices
Despite the prices of most major cryptocurrencies stagnating over the course of the last 30-days, with the likes of Bitcoin and Ethereum only up a respective 1.7 and 4.0% and BNB and XRP down 3.9% and 7.0% each according to CoinMarketCap, the prices of non-fungible tokens (NFT) have been pumping. According to NFT Price Floor, the price floor to get your hands on an NFT from the Bored Ape Yacht Club (BAYC) collection has jumped 17.5% over the course of the last 30-days to $117,750.
The Bored Ape Yacht Club NFT collection is currently the most valuable in the NFT space, with a market capitalization (according to the price floor) of around $1.177 billion. The minimum price to get your hands on a CryptoPunk NFT is up around 5.5% over the same time period – CryptoPunk is the second most valuable NFT collection, with a price floor market cap of also over $1.0 billion.
NFT Prices Rally Despite Macro, Regulatory Headwinds
The rally in NFT prices comes despite broader derisking in traditional asset classes, with a string of strong US data releases last month boosting Fed tightening bets – with inflation heating up again and US economic activity and labor markets remaining robust, the Fed is now seen taking interest rates to around 5.5% by the middle of the year, versus expectations for rate hikes to pause around 5.0% only one month ago.
Such a shift in Fed tightening expectations has typically been a negative for digital assets, which are still very much viewed as a speculative asset class. In such circumstances, NFTs have historically been one of the worst-hit sectors of the crypto space. The rally in prices also comes amid a ramp-up in regulatory pressure on centralized crypto firms in the US, with the SEC recently targeting Kraken over its staking program and Paxos over its issuance of BUSD.
Surging Volumes Support Prices
Prices have been able to remain resilient amid a surge in NFT trading volumes. According to a just-released monthly report by DappRadar, trading volumes surpassed $2.0 billion in February, the highest monthly trading volume since May 2022. Meanwhile, DappRadar’s website shows that, over the course of the last 30 days, the top seven NFT trading exchanges saw trading volumes exceed $2.0 billion, with the new kid on the block Blur enjoying a massive $1.45 billion of these flows.
Blur launched its platform back in October, and there was a lot of hype regarding the platform last month in the lead up to the platform’s token airdrop – BLUR was allocated to users of the Blur platform based on their trading activity. The exchange has seen stratospheric growth in the last 30 days – according to DappRadar, the platform has seen 158,000 UAWs (unique crypto wallets interacting with it), up over 200% on the prior 30-day period. Over the same period, volumes are also up over 200%, while transactions were up 150%.
Blur’s marketplace currently charges zero fees on trades and its surge in popularity in February encouraged OpenSea, the established industry leader in the NFT marketplace space, to also cut fees to zero. Blur airdrop hype and fee slashing from the biggest NFT marketplace players has been attributed by many analysts as the major catalyst for the recent surge in NFT trading volumes, as well as recent resilience in NFT prices.