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Decoupling of NFTs from Cryptocurrencies

Part of our special research report

State of the NFT Market | Q1 2022

In partnership with CryptoSlam

NFTs are increasingly being seen as an asset class that is distinct from cryptocurrencies, and this is reflected in the rising valuations and trading volumes in recent months. For instance, sales of Bored Ape Yacht Club tokens doubled from December 2021 to a record US$313 million in January 2022, according to CryptoSlam data.

In contrast, cryptocurrencies like Bitcoin and Ether have seen their values drop for various reasons including a proposed ban by Russia. When Russia invaded Ukraine, crypto fell along with global stocks and most financial assets.

Mintable’s Burks said decoupling is inevitable since new entrants to the market are interested only in NFTs and not the cryptocurrencies they trade in.

“A cryptocurrency, a fungible token, is a store of value or a utility token, whereas an NFT is more of a membership, or a piece of art, or a collectible… They are totally different as you have a lot more value packed into an NFT,” said CryptoSlam’s Calpu. 

He added that some crypto investors have diversified into NFTs and that the opportunities are growing since fractionalization may enable further use cases.