Why are NFTs Sidestepping the Crypto Crash?

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DappRadar x The Defiant Exclusive Report

N.B. Why Are NFTs Sidestepping The Crypto Crash: First published by The Defiant on January 28, 2022

In recent weeks, a combination of macroeconomic events has shaken the markets, reminding everyone about the industry’s latent risks and ubiquitous volatility. The problems in Kazakhstan around Bitcoin mining made waves. With a new COVID outbreak, the unease about a likely rise in the interest rates by the Federal Reserve and the latest political issues in Ukraine created a hostile environment dragging capital markets down. 

The correlation between crypto and traditional markets made the effect widely felt in blockchain assets, with Bitcoin and Ethereum’s ETH losing half their value since all-time highs in November. The same goes for BNB, ADA, SOL, AVAX, SAND, MANA, GALA, and several other cryptocurrencies performing well historically. The total crypto market cap shrunk to $1.6T from $2.9T in that period.

Without question, the crypto market is currently experiencing a challenging period. The sentiment in the market signals fear. However, the metrics related to the performance of specific blockchain verticals like NFTs might suggest otherwise. 

Understanding NFT macroeconomics

While a group of events has hampered the crypto market, a series of factors have positively impacted the outlook of NFTs at a macroeconomic level. 

Firstly, the inclusion of celebrities and big brands in the NFT world appears to be growing by the day. Stars with a massive social reach like Neymar Jr. (+200M followers on Twitter and Instagram) and Kevin Hart (+192M followers on Twitter and Instagram) have publicly announced their recent entries into the Bored Ape Yacht Club (BAYC), one of the premiere NFT projects. 

To make the impact even more profound, Twitter, perhaps the most popular social media platform across crypto and NFT enthusiasts enabled its first web3 functionality inside the social platform a few days ago. Social media platforms Instagram and Facebook are expected to follow. Meanwhile, retail giant Walmart has filed several trademarks for NFT use.

The popularity of these assets is growing more than ever. For the first time, searches for the term “NFT” are outpacing those for “crypto”. Plus, increased interest from Asia is promising. A market dominated by users in North America and Europe will now welcome an Asian NFT audience.

NFTs on-chain metrics tell a bullish story

NFTs singlehandedly produced one of the most impressive metrics we saw in the blockchain industry last year. In total, $25B was generated by this type of asset in 2021 alone. That’s a whopping 18,414% more than the four previous years combined. 

While cryptocurrencies are struggling, NFTs appear to be thriving. Narrowing down the analysis to Ethereum, responsible for 75% of last year’s volume, we see a positive trend.NFT sales and the number of users have increased in this blockchain, and so, too, have the Unique Active Wallets (UAW) connected to NFT dapps (collectibles and marketplaces).

Since December 2021, more than 53,300 UAW have connected to Ethereum NFT dapps on average per day. That’s 43% higher than the numbers seen during Q3 of last year.

In addition to positive macroeconomic events, NFTs’ central role in the play-to-earn and metaverse narratives has contributed to bullish on-chain metrics despite unfavorable cryptocurrency indicators. The search for a decentralized and interoperable metaverse benefits NFTs. 

Furthermore, as the value of the underlying assets supporting NFTs is on the downside, individuals might see the negative cryptocurrency trend as a buying opportunity. Although January isn’t over, unique traders are higher than ever.

A record of 1.6M unique traders have propelled Ethereum NFTs to generate more than $3.7B in sales, excluding those on LooksRare, and are on pace to break the record set in August 2021 of $4.5B.

This set of on-chain metrics tells the story of adopting a new asset class and the market’s positive sentiment. Still, another metric makes even more evident the appreciation of NFTs: floor price. 

Floor price analysis

The floor price is one of the most important metrics to assess in an NFT collection, especially from an investor perspective. The floor of an NFT collection is the minimum asking price and represents the lowest entry barrier. 

The recent floor price analysis for some essential Ethereum collections signals that NFTs behave like assets that store value. A class of assets outperforms important cryptos and even traditional assets like gold or the S&P 500 Index. 

The value of the NFT space as a whole is increasing. According to the floor (price) market cap for the top 100 NFT collections, the value of NFTs has decreased by $2.4B from November and is currently estimated at $14.8B. Despite the 50% hit to ETH, the value of the most traded collections was barely affected by 15%, showing that the category resisted the crash. 

One of the NFT collections that have had a direct influence on the positive NFT trend is BAYC. At the start of November, when BTC and ETH were peaking, the collection’s floor price floated around 30 ETH. One week later, the BAYC floor increased over 60% to surpass 50 ETH despite a 15% drop in ETH’s price.

By the end of the year, the cheapest BAYC could be purchased for 60 ETH, which has surpassed 90 ETH. This means that to buy the most affordable Bored Ape, one would have to spend more than $225,000 at current ETH prices.

NFT crypto

While the most important cryptos have lost around half of their value in the last two months, BAYC has gained 207% in terms of ETH from Nov. 10. But most importantly, the collection’s floor has gained 14% in terms of the actual value measured in USD. Holding a BAYC from Nov. 10 until today would represent a capital gain of 14% while holding any of the relevant cryptos would net a loss of around 50%. It is fair to say that BAYC has become an asset class that stores value.

BAYC isn’t the only avatar collection to increase its value. World of Women, another Ethereum avatar collection, has gained 383% in terms of ETH since Nov. 10, gaining 185% in real value over the same timeframe. CyberKongz and their voxel (VX) versions have seen their floor prices appraise by 27% and 68%, respectively, in real value, since December of last year. The same happens with Doodles, whose floor price has increased its USD value by 224% since November. 


In the case of CryptoPunks, a historically relevant NFT collection, it is trickier to analyze. Even though this collection has not performed at the same level as its peers, Punks have still outperformed several crypto-based assets. The Cryptopunks floor reached 100 ETH on Nov. 2 and came down to 83 ETH one week later, the same day BTC and ETH hit their all-time highs.

From that date, the floor price in terms of ETH has decreased 9.6%. While the actual value only shrunk to $229,000 from $254,000. Still, it is safe to say that CryptoPunks are assets that store value.

NFT crypto

Avatars saw their value increase significantly, but NFTs related to virtual worlds and games have performed exceptionally well. That is the case of Forgotten Rune Wizards, whose floor price in ETH has hiked 210% from Nov. 10, and its real value is 132% higher than in December. Similarly, the floor price of the Gala Games VOX NFTs has increased 145% in terms of ETH since November.


NFTs representing virtual worlds have held the value gained from the metaverse hype cycle. Virtual lands in The Sandbox and Decentraland, for instance, have maintained their floor price at levels seen after Facebook’s rebranding announcement, albeit with a decrease in their real USD value.

Meanwhile, the floor price of virtual apartments inside Worldwide Webb has risen 242% in ETH terms since November despite the negative crypto trend, while Cryptovoxels floor parcels cost 17% more ETH than in November. 


Analyzing a collection’s floor price sheds some light on the project’s stability from an investment perspective. The recent analysis confirms that some NFTs resist the negative trend across the markets. But why is this scenario playing out? Why are NFTs proving to be resistant to changes in the price of cryptocurrencies?

The answer to this question might not be so straightforward. The combination of certain factors makes some NFTs appealing to rational investors. 

Cultural value & adoption

There is an argument where certain NFTs should be viewed as cultural pieces rather than digital assets. And like certain pieces of art, certain NFTs might be considered real investment opportunities by some people. “The First 5000 days” by Beeple’s introduced non-fungible tokens to a new audience with Christie’s $69M auction. Generative art collections like Fidenza, Ringers, or Autoglyphs are being presented as new ways of expression and worth thousands of dollars at least. 


In the same manner, BAYC and CryptoPunks reached the mainstream stage. On Aug. 23, VISA announced the purchase of CryptoPunk #7610 for $150,000, solidifying the status of Punks as assets to store value. Also, 101 pieces from the BAYC collection were auctioned at Sotheby’s for $24M.

For now, just a few collections have reached the status. Still, the potential applications in music, tickets, sports, and fashion loom around the corner. All in all, NFTs converge with deep human emotions. Only time will tell whether some NFTs will create a cultural impact that transcends generations.


One of the essential aspects that successful NFT projects share is the rewards granted to their community members: added value or utility inherited by holding an NFT of any of these projects. 

For instance, Larva Labs popularized a utility blueprint after CryptoPunks owners received a free Meebit, increasing the actual capital gains from the initial investment. The same can be said for projects like Cool Cats (floor price in ETH up 150% from Nov. 10), The Meta Key (370%), Doodles, or BAYC itself. 

Utility can also be found in yield-bearing NFTs. Projects that distribute their native utility tokens daily, like the case of CyberKongz and their BANANA token. Holders of Genesis Kongz receive ten daily BANANA tokens worth $24 each at writing. A similar scenario is found in the SupDucks (35%) and the VOLT token, as well as in Cool Cats, and their future MILK token. 

BANANA utility framework; source: CyberKongz 

Also, NFTs converge with other categories like DeFi and games. A clear representation of the blending between DeFi and NFTs are platforms like NFTfi that allow users to use NFTs as collaterals. The fractionalization of NFTs, or projects like Pixel Vault, whose MetaHero Universe (57%) NFTs can be staked to farm the POW token. 

And, of course, there is the utterly relevant game element. Mirandus NFTs and Aurory Villagers have both maintained their floor value despite significant drops in the price of ETH, SOL, GALA, and AURY. We also previously observed the appraisal of Forgotten Rune Wizards, another NFT collection with game mechanics. Although it is challenging to keep floor prices on myriad game alternatives, it is safe to say that the demand for blockchain games is on the rise, adding value to these types of NFTs.

Involvement of Celebrities & big traditional players

Another relevant trend that has positively shaped NFTs is the involvement of celebrities and renowned brands. BAYC started to gain steam as sports superstars like NFL’s Dez Bryant, NBA’s Stephen Curry, Post Malone, Snoop Dogg, and Eminem joined the elite club.

The BAYC community became even more exclusive after welcoming Jimmy Fallon, Paris Hilton, Neymar, and Kevin Hart. Celebrity’s positive impact is exemplified by World of Women, a collection that experienced a 250% floor price growth just hours after Eva Longoria announced her purchase. Doodles is another project that has benefitted from having renowned NFT personas like Pranksy, Loopify, and Steve Aoki.

Celebrity NFTs; source: DappRadar

In the same way, there is the impact of big traditional players. Brands like Adidas, Coca-Cola, Pepsi, Budweiser, and several others have either launched their collectibles or have partnered with important NFT teams to make their dent in the space. The same goes for fashion giants Gucci, Dolce & Gabbana, Burberry, and others who have taken advantage of the hype surrounding the metaverse.

Teams becoming Brands

The teams behind the NFT collections are highly responsible for their project’s fate. Surrounding the team with talented artists and experienced developers is a successful recipe some teams have found. And once a team is successful, they can become authentic brands within the space. 

Source: RTFKT

That is the case of RTFKT, the team behind Clone-X, and responsible for unique NFT pieces in collaboration with Jeff Staple and Fewocious. The digital design and fashion brand has consistently met expectations and has tackled any challenges properly. RTFKT became one of the most influential brands in the Web3 space and was acquired by Nike for an undisclosed amount last December.

Scarce assets

Finally, there is the scarcity factor. An important one since it relates directly to human psychology. The anxiety of missing out on something, also known as FOMO, is relatable to scarce assets and investment markets. NFTs combine both.

Most collections launch a limited supply of NFTs that will remain the same forever. Whether it’s 10,000 or 20,000, the limited supply for a given edition will always stay the same. That’s the magic of blockchain. 

The upshot is that NFTs have gradually become an asset class of their own. While the correlation with cryptocurrencies will remain due to the nature of this technology, NFTs are slowly creating an economy for themselves, one with their macro events and market factors positively or negatively impacting the space. 

The sum of the previously revised factors such as the cultural value, the added utility, the involvement of celebrities, the brand awareness, and the scarcity of these assets have propelled the latest wave of NFT adoption. 

The best part is that what we are seeing is only the tip of the iceberg. Projects like Larva Labs, BAYC, Cool Cats, RTFKT, CyberKongz, and Doodles will remain highly involved in the metaverse narrative. The friction and resistance from non-crypto users will decrease with the launch of products that reduce customer friction, like the expected Coinbase marketplace that will integrate MasterCard payments. There are plenty of potential use cases where NFTs will be embedded in traditional business models. 

There is no clue whether the current bearish trend in the cryptocurrency market will last for two more weeks or two more years. Nevertheless, NFTs are retaining and increasing their real value amid the current conditions, proving themselves as digital assets capable of storing value.

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DappRadar x The Defiant Exclusive Report | Originally Published 01.11.21 on The Defiant