over 1 year ago • 1 min
The second quarter wasn’t pretty for much of the crypto market. But here’s a bright spot: the total market value of Ethereum’s top 100 NFT (non-fungible token) projects – when priced in ether – surprisingly ticked higher.
This chart shows the total market value over the past 10 months. You can see it peaked in April, then slumped in May, before bouncing back in June. This all happened while the price of ether was under pressure – dropping about 67% over the second quarter.
It’s interesting: with ether’s price sliding, you’d expect those riskier NFTs to fall even more – after all, that’s what happened with the more volatile altcoins. But there’s something else at play here. See, most NFTs are built on Ethereum and are priced in ether, which means you first have to acquire ether with traditional currencies like the US dollar, if you want to buy one. And right now, ether is cheaper in US dollar terms, which could be driving increased demand for Ethereum NFTs – the idea here being to buy NFTs and sell them when ether’s price goes back up.
NFTs are still a risky bet, mind you. And Ethereum’s top NFT 100 collections don’t sell for cheap. But what this recent quarter shows you is that their values typically don’t fall – or rise – in lockstep with ether (or, by extension, with the rest of the crypto market). And that suggests that NFTs might even offer some diversification benefits for your crypto portfolio. But if you’re going to dabble in NFTs, make sure you have a good understanding of how to value them first.
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