How Did NFTs Perform in 2023?

As we bid farewell to another transformative year in the crypto space, we must evaluate how different sectors of the market performed.

In this article, we will look at one of the most captivating phenomena that has continued to redefine the crypto ecosystem: Non-fungible tokens (NFTs).

How did NFTs do in 2023?

NFT projects played an important role in crypto’s journey in 2023. Despite popular negative sentiments about the sectors, statistics show that NFT users have kept the space alive. 

In the past 30 days, the top 10 NFT blockchains have been on fire, racking up a massive $1.5 billion in sales. This shows that NFTs are still fashionable and in demand. Like in other sectors of the crypto industry, the NFT space welcomed innovations and saw some changes.

Some moments had a more lasting impact than others, and that’s what we’re looking at. For example, 2023 saw the emergence of Bitcoin Ordinals. There was also a division regarding creator royalties. In addition, the SEC brought its first case against NFTs this year. 

Ordinals Took Us by Surprise

Earlier this year, Casey Rodarmor, a software engineer, invented Bitcoin Ordinals. Rodarmor launched the application on the Bitcoin mainnet after a blog post on January 21. Bitcoin Ordinals are the equivalent of NFTs on the Bitcoin blockchain. It is safe to say that the Bitcoin Ordinals took us all by surprise.

Ordinals are a way to create distinct digital items out of individual Satoshis that may be inscribed with text or graphics. This concept departs from traditional digital assets and NFTs as it relies on Bitcoin’s existing blockchain structure.

Ordinals were beyond mere hype. The stats prove this. By December 2023, 263K users had written over 47M Ordinals on Bitcoin. The expanded use of the network has also benefited miners, who have made a huge $150 million in fees on $850 million of traffic on Ordinals marketplaces. 

Thanks to Ordinals transactions, the Bitcoin network surpassed Solana in monthly sales volume in May. With nearly $744 million in sales over 30 days in December, the network also surpassed the Ethereum network’s $391 million in revenues. It is important to state that not all Bitcoiners believe Ordinals are a plus for the network. But we can all agree that the Ordinals took the year by storm.

Some Outstanding Moments for NFT Projects

Several NFT projects made outstanding comebacks in 2023. For example, the renowned NFT collection Cryptopunks maintained its media spotlight in 2023 with sales that had never been seen before. A record-breaking sale of a Cryptopunk masterwork for an incredible $1.1 million on the market demonstrated the value and ongoing appeal of these digital treasures. 

Interestingly, several other cryptopunks sold for substantial prices in the hundreds of thousands. This rebound established a standard for high-value deals in the face of market turbulence and reaffirmed the NFT market’s enduring appeal and investment potential.

Another highlight of the NFT market this year was the battle between OpenSea and Blur. Both platforms are NFT marketplaces. However, Blur launched a strong rivalry with OpenSea for the top spot.

The “Royalty War” had a ripple effect on the entire NFT ecosystem. Blur’s victory in taking a sizable chunk of OpenSea’s previously held royalty market share demonstrated the dynamic nature of market rivalry. This win affected marketplace fees and revenue generation. 

The SEC’s Case Against NFTs

Another high-profile moment this year was the SEC’s case against NFT. The US regulator charged Los Angeles-based entertainment firm Impact Theory for selling NFTs, which it termed unregistered securities.

The SEC charged a couple of other NFT projects for selling unregistered securities. However, several crypto experts and leading voices, such as Hester Pierce, rejected the commission’s claims.

Regardless, the SEC’s view of NFTs as unregistered securities led to a call for regulatory clarity on the asset class. 

The optional royalty trend

Royalties made NFTs popular. They ensured creators earned a percentage of their work. However, the concept of optional royalties emerged in 2022 but took off in full force this year.

Optional royalties allow buyers to decide how much of the royalties they wish to contribute to an NFT. However, the drawback is that creators might not receive payment under this approach. Research showed that NFT creators received little royalties this year.

Royalty losses from the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) NFTs reached almost $20 million this year.

The trends witnessed this year show that the NFT space will see increased competition in 2024. We expect more integration between NFTs and DeFi in 2024. In addition, we believe the sector will have clearer policies in the coming year.

Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.

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