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Q1: The Initial Boom and Peak
The first quarter of 2022 marked the initial boom and peak of the NFT market. The market saw its first true hype cycle, reaching its zenith early in the year. The market capitalization of all collections listed on the data aggregation platform NFTGo peaked at $35 billion in March. Additionally, NFT trading volume also peaked in the first half of the year, with the weekly tally reaching a yearly high of $1.3 billion in April. Despite a decline in interest from the general public, the NFT market was able to hold steady, with nearly $8 billion traded in the first quarter of 2022. However, the volume of sales fell by nearly 50%, indicating a slowdown in the volume of buyers and sellers.
Q2: The Stabilization and Mainstream Integration
Moving into the second quarter, the NFT market began to stabilize, and we saw further integration into mainstream culture. Major brands and corporations began to engage with NFTs during this period. Big names such as Starbucks, Instagram, Nike, and Reddit, along with luxury brands like Burberry, Gucci, Louis Vuitton, Dolce & Gabbana, and Salvatore Ferragamo made their entries into the NFT market. The Coinbase NFT marketplace was also launched in April, but it struggled to gain traction due to its lack of differentiated product offerings. Despite these struggles, it successfully minted out dozens of collections.
Q3: The Advent of NFTs as Digital Collectibles
The third quarter heralded the advent of NFTs as digital collectibles. Reddit’s NFT project was launched in July, introducing over 4.3 million new users to the NFT space. The social network released Polygon-based profile picture (PFP) avatars based on Reddit’s logo, Snoo, which were dubbed “digital collectibles”. Around the same time, Nike expanded its presence in the NFT space, launching virtual officially licensed sneakers with its CryptoKicks NFT collection and announcing its intention to launch the .Swoosh platform by early 2023.
Q4: The Emergence of New Marketplaces and Decline
In the final quarter of the year, the NFT market saw the emergence of new marketplaces and a subsequent decline. New marketplaces such as LooksRare, Blur, X2Y2, and Magic Eden posed a challenge to OpenSea, which had been the leading NFT marketplace. In particular, Blur, a decentralized NFT marketplace launched in October, attracted active traders by offering features such as zero trading fees and airdrop rewards for users. However, by the end of the year, the market capitalization of all collections listed on NFTGo stood at $21 billion, representing a 40% decline from its peak in March.
Click here: If you want to read Part 1: The first major market launch: NFT Milestones of 2021
Oliver Meyer is the founder of ACYC. With a childhood interest in computers and programming, Oliver channeled his passion into a successful entrepreneurial career, founding several companies including PARUG GmbH and fruittune GmbH. Over a decade, he has honed his expertise in software architecture and IT, demonstrating commitment and discipline in every venture.
