Web3 is bouncing back.
VIP+’s analysis of key metrics across NFTs and cryptocurrency shows a reversal of fortune from the recent declines seen across several quarters, all led by the resurgence of Bitcoin.
Q1 2023 was the first quarter that Bitcoin saw an increase in value per unit since Q4 2021. The quarterly increase was a substantial $12.1K per coin versus Q4 2022 (+73%) but does remain below levels seen throughout 2021 and 2022.
The rally reflects a combination of investors spooked by recent U.S. banking crises and the easing of inflation, which could be freeing up more disposable income for investing in crypto.
The same resurgence can be seen for the two most valuable coins following Bitcoin — Ethereum and BNB. Both were at their highest values seen in a year and represent substantial returns for investors who got in early in 2020 but they have yet to reclaim the heights seen in 2021, when crypto and NFT mania ran unabated.
Global NFT sales increased in Q1 2023 for the first time since the year before. Total sales were worth $2.8 billion, representing an increase of $1 billion (+56%) over the prior quarter.
Contextually, it’s important to note that, while they are bouncing back, NFT sales are nowhere close to the highwater mark of $13.3 billion reached a year ago, before the bubble burst. Yet this is important news for media companies, many of whom had earmarked NFTs as a revenue growth area before the crypto winter struck.
An upturn in fortune is also demonstrated with data showing the number of unique NFT buyers purchasing via major marketplaces. On a quarterly basis, the total of distinctive purchasers using Ethereum reached new heights in March 2023, with 358,259 different buyers. This comes in just ahead of what was seen in March 2022 (345,571) and December 2021 (344,024), suggesting the world’s most popular NFT marketplace is reflecting an uptick in consumerism.
Polygon also saw the number of buyers reach new heights in the first quarter. There were 157,855 different NFT buyers at the end of the first quarter in 2023, a 241% increase of 111,569 from the same period in 2022. Of the remainder of the five largest NFT marketplaces, BNB could also count more buyers than in the prior year, indicating NFTs are coming back to consumer consciousness.
Ethereum was far and away the biggest NFT marketplace in March 2023, with over half a billion in sales made worldwide. The next largest was Solana at $94 million, followed by Polygon and ImmutableX, the only other two to record more than $20 million in sales. NFTs are a marketplace dominated by .Eth.
When assessing cryptocurrencies, Bitcoin is substantially the largest coin on the market, followed by Ethereum, Tether, BNB and USD Coin. Bitcoin is worth more than the combined market cap of all other coins worth more than $5 billion, to give a sense of perspective.
This also shows that the crypto winter should perhaps be considered the crypto frost, especially given there are signs that it is beginning to thaw. If it continues to do so, expect media and entertainment companies to quickly hop back on the bandwagon later this year.
