When the NFT mania took over the crypto verse, the internet was flooded with NFT references, success stories, and of course a lot of hype. Over the past year, the crypto community has seen a phenomenal increase in non-fungible tokens. In fact, the NFT market grew nearly 300% in 2020, while NFT sales rose to $ 2.5 billion in the first half of 2021. That was, of course, a huge increase from $ 13.7 million in the first half of 2020.
After the advent of cryptopunks and monkeys, NFTs became a major trend and on September 8th, one of the largest NFT events in history took place when more than 18,000 addresses competed to coin 7,000 NFTs from a collection called The Sevens.
This contributed to the highest recorded average gas price, which hit more than 5,000 Gwei in just 10 minutes. In addition to increased interest from private customers, an influx of institutional investors also encouraged the rise of NFTs.
But what impact has this had on the market’s altcoins?
NFTs pumping altcoins?
High personal and institutional interest was key to the rise of the crypto verse, but NFTs have had their own impact on the market. An interesting trend here was that while most networks wanted to jump on the NFT bandwagon, only a few could really take advantage of it.
Notably, low cap altcoins gained momentum while the NFT fever peaked, but it was short lived. On the flip side, larger cap altcoins like MATIC and Litecoin saw price-driven growth. In fact, it appeared that NFTs played an important role in pumping certain alts.
For example, the Litecoin Foundation recently announced the launch of OmniLite, a decentralized token creation platform that enables decentralized tokens and smart contracts to be produced along with crypto assets such as tokens and NFTs. In response, LTC’s price held up well in the market even as the market went down.
Additionally, Origin partnered with Polygon to offer mainstream Layer 2 NFTs, and news of this helped MATIC’s post-pump recovery. In fact, MATIC recorded an increase of 3% in just 24 hours.
What’s noteworthy, however, is that this NFT wand didn’t work for all altcoins. In the case of Axie Infinity, for example, a ton of old coins were being moved at the time of going to press. This could have been an attempt to drive the price up, but it was in vain. Axie is an NFT-based platform, but the price of the alternative seemed to be struggling even during the NFT boom.
Highest institutional interest
At the time of this writing, Alibaba’s Tmall Mooncake NFTs were sold out, while Chinese internet giant Tencent was also making a foray into the NFT world by launching an NFT trading platform called Huanhe.
Despite this strong institutional interest, the broader NFT market has seen a decline recently. In fact, daily volume dropped to around $ 56 million on September 12th – a volume decrease of nearly 50% from September 9th.
Finally, it should be noted that NFTs are still illiquid. Their worth depends on the hype, and as long as that hype continues, NFTs will have solid value.