Indices tracking the prices of non-fungible tokens (NFTs) are up nearly 10% this month, surpassing ether (ETH), the cryptocurrency in which many are denominated, which is up just over 2%.
Nansen’s NFT-500 index, which tracks the 500 most valuable NFTs, has added 9.35% this year, while the Blue Chip 10 is up a similar amount. Ether, according to CoinDesk Indicies data, advanced 2.2%.
In an interview with CoinDesk during Taiwan Blockchain Week, Yat Siu, founder of Animoca Brands, pointed to the newfound maturity and diversity of the NFT space as a reason why prices have recovered from their 2022-2023 crypto winter lows.
“The majority of speculators in the NFT and GameFi space have left, which has strengthened the base because the people left are genuinely interested,” he said.
January’s gains are unique in that ether NFT prices initially failed to keep pace with the cryptocurrency’s year-end surge. However, traders appear to have changed their minds now that the hunt for utility, or real-world use, is underway.
The rally comes at the same time that the average price of an NFT has fallen 13% to $107, according to data from CryptoSlam. The number of transactions increased by 30%, while sales volume fell by 36% to $1.1 billion for the month. Wash trading, a form of market manipulation where a buyer and a seller collude to create the appearance of demand, is responsible for 39% of all volume, according to data from CryptoSlam.
Some NFT-adjacent crypto sectors are not doing so well.
The CoinDesk CoinDesk Culture & Entertainment Select Index (CNES), which includes metaverse tokens Axie Infinity, The Sandbox and Decentraland, fell 22%.