Ethereum NFT Market Cap Has Fallen Over 59% over the Past Year

Audy Castañeda
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<strong>Ethereum NFT Market Cap Has Fallen Over 59% over the Past Year</strong>

Decreasing market cap of NFT projects is due to manipulations by bad actors in the ecosystem.

On Feb. 9, DappRadar published a report showing that the market cap value of Ethereum NFTs fell by 59.60%, from $9.3 billion in 2022, to around $3.7 billion in early 2023.

DappRadar’s study is based on the market´s capitalization analysis of 81 of the largest NFT collections running on the Ethereum network.

As informed via Twitter, DappRadar claims that “by employing a machine-learning algorithm, DappRadar generates an accurate estimate of the individual value of each NFT.”

According to DappRadar, the Terra Luna collapse in May 2022 was the main cause of the loss of market capitalization of 88% of NFT projects running on Ethereum by June 2022.

Therefore, the decline in the market cap of NFT projects is not due to a lack of interest from investors, but rather due to the manipulations of bad actors in the ecosystem.

This is likely the main cause of the largest crash in the cryptocurrency industry, as during the FTX crash, the market capitalization of the entire NFT ecosystem collapsed as a result of the global cryptocurrency market.

These Were the Highest Profiting NFT Collections on Ethereum Since 2022

The report found that some projects launched during 2021 and early 2022 saw “significant market capitalization growth” of up to 260%. Among those projects were the Azuki, Pudgy Penguins, and Degen Toonz collections, whose market capitalization increased by 113.89%, 260%, and 204%, respectively.

Among the new NFT projects, launched after the fall of Terra Luna, are: The Potatoz with a market capitalization growth of 134.68%, Renga with 211.63%, DigiDaigaku with 209.88% and God Hates NFT with 1,653.28%.

It is worth mentioning that all of these projects achieved spectacular growth, despite ETH, the native currency of the Ethereum network, experiencing a 60% price drop over the past year due to the bear market.

Bored Ape Yacht Club Dominates the Market

According to DappRadar, Yuga Labs, the parent company of the Bored Ape Yacht Club project, has dominated the Ethereum network’s NFT market, “establishing itself as a leading player in the NFT sector,” despite the exponential decline of other projects.

While Yuga Labs funding accounts for 67% of the total market value of Ethereum NFT, Bored Ape Yacht Club’s market cap depreciated 64.92%, from $2.6bn to $934m, by the end of 2022.

However, that hasn’t stopped Yuga Labs from buying two of the biggest NFT collections on the market, CryptoPunks, and Meebits, for an undisclosed sum to date. Both collections are already experiencing a significant recovery, after suffering falls of up to 60% in 2022.

Now that the cryptocurrency market is showing signs of recovery, though, the NFT ecosystem probably has some chance to breathe. And green pastures in the future may be seen, as trading activity around blue-chip collections has recently started to pick up, and there are even NFTs taking over the Bitcoin network.

By Audy Castaneda

Bitcoin Blocks Keep Rising; What’s Happening with Blockchain?

Audy Castañeda
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<strong>Bitcoin Blocks Keep Rising; What’s Happening with Blockchain?</strong>

The trend seems to be for Bitcoin network fees to increase in the future, NFT or not.

The average size of blocks added daily to the Bitcoin Blockchain is currently around 2MB, the highest level in the cryptocurrency’s history, according to data from OKLink.

On Sunday February 5, for the first time the average size of the blocks exceeded the level of 2 MB, a number that represents double the usual average size of Bitcoin blocks, which are usually around 1 MB.

This new trend of full blocks continues this Tuesday, with on-chain analysts trying to understand what is happening in the cryptocurrency network with the highest market value.

The Chaincode Labs engineer, known by the pseudonym Murch, tweeted this Tuesday morning that the Bitcoin mempool is currently at a depth of 51 blocks.

The mempool is a kind of “tank” where users’ BTC transactions wait to be collected by a miner and added to a block. It turns out that the demand on the network is so high that it is creating queues in the mempool, and causing blocks to be added closer and closer to their maximum capacity.

Since the Bitcoin Blockchain is scheduled to add a new block every ten minutes, the queue of transactions waiting for validation only grows. As Murch pointed out, it’s been over 47 hours since the Bitcoin mempool faced a block queue.

What is Filling Bitcoin Blocks about?

The increase in demand for Bitcoin block space does not represent organic growth in user activity on the network. Actually, a single project occupies most of the blocks: The Ordinals protocol.

Ordinals allow non-fungible tokens (NFTs) to be stored on the Bitcoin Blockchain by writing metadata to satoshi units that give them individual identities, and enable their tracking and transfer.

As MB (Bitcoin Market) data scientist Breno Brito explains, Ordinals resembles the old Colored Coins experiment, but advances in its application thanks to updates that have been implemented in Bitcoin over the years, such as Segregated Witness. (Segwit) in 2017 and Taproot in 2021.

Are Bitcoin NFTs a Good Idea?

Thanks to Taproot, creating a Bitcoin NFT is not an expensive operation. However, this does not mean that NFTs will not cause network fees to rise, especially if they continue to take up more and more space within blocks.

“NFT content competes for limited space with other transactions, so yes, the fees tend to increase with the dispute,” explains developer Narcélio Filho. For him, this rise in rates helps to attract more miners to the network, which consequently increases the security of the entire ecosystem.

Breno Brito, Bitcoin Market Data Scientist, argues that the trend is for Bitcoin network fees to increase in the future, NFT or not.

“Everyone knows that the bitcoin transaction fee is going to have to go up at some point. Block rewards will continue to fall over the years due to the halving, so there will come a time when miners will demand higher transaction fees to continue profitable operation,” he explains.

By Audy Castaneda

Economist Thinks China’s RMB Will Replace the US Dollar

Audy Castañeda
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<strong>Economist Thinks China’s RMB Will Replace the US Dollar</strong>

Economist Nouriel Roubini predicts that a bipolar monetary regime would replace the dominance of the US dollar.

Economist Nouriel Roubini has predicted the eventual demise of the US dollar, although he is often known for inconsistent predictions.

The dollar has been the dominant currency for decades. Most nations store some of their reserves in dollars. It is also widely used as a mode of exchange for international trade.

Nevertheless, the economist Roubini predicted that the reign of the unipolar currency would soon end. The economist is often referred to as “Dr. Doom” after he predicted the collapse of the 2008 housing bubble.

“China’s yuan will end US dollar dominance and create a bipolar currency system in the next decade,” says ‘Dr. Doom’ Nouriel Roubini.

The Acceleration of De-Dollarization

Roubini shared his latest views in which he mentioned that a bipolar currency regime would replace the dominance of the dollar. He explained this in the following terms:

“Given the increasing militarization of the dollar for national security purposes and the growing geopolitical rivalry between the West and revisionist powers like China, Russia, Iran and North Korea, some argue that de-dollarization will accelerate.”

Following US sanctions, Russia and India are also winding up their rupee (INR) trading. According to a Business Standard article, India is talking to Southeast Asian, African and Latin American nations to start trading with INR.

CBDD Will Challenge USD, Roubini Says

The crypto skeptic has commented that the emergence of central bank digital currencies could lead to a multipolar monetary regime. Governments around the world have been pushing their versions of CBDCs for the past two years.

China recently promoted its digital yuan during the Lunar New Year through initiatives totaling more than $26.6 million. Last month, the Central Bank of Saudi Arabia announced that it is experimenting with a CBDC pilot program.

The economist says that the United States’ strict policies of imposing sanctions on its rival countries will diminish the attractiveness of the dollar. America’s rival China, on the other hand, is pushing for the increasing adoption of the renminbi (RMB) as the world’s reserve currency.

US rivals Iran and Russia are reportedly launching a gold-backed CBDC to facilitate cross-border payments.

Do Not Always Trust Roubini

It’s worth noting that Roubini has often been inconsistent with his predictions. After predicting the collapse of the housing bubble, the economist forecasted that the S&P would fall 20% in May 2010, but the index was up more than 20% in one year.

In August 2020, Roubini wrote that reports of the dollar’s demise are “greatly exaggerated.” Yesterday, though, he predicted the end of the dollar’s “exorbitant privilege” in the FT article.

By Audy Castaneda

Skepticism Reigns about the Crypto Market as Bitcoin Takes Off

Audy Castañeda
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<strong>Skepticism Reigns about the Crypto Market as Bitcoin Takes Off</strong>

Bitcoin (BTC) price rose 47% in January 2023 and peaked at $24,300. Yet traders remain skeptical and expect a significant price correction in February 2023.

Cryptocurrency traders have seen many ups and downs in recent years, but despite volatility, the cryptocurrency market continues to attract more investors.

January 2023 saw a surge in cryptocurrency prices, with Bitcoin, the largest and most pioneering crypto, rising nearly 47%, to reach a high of $24,300.

However, as the market begins to show signs of consolidation, many cryptocurrency traders are skeptical about the future, predicting a price crash by February 2023.

Cryptocurrency Traders Are in Disbelief

Despite the prevailing skepticism among traders, some experts believe that this outlook actually improves the likelihood that prices will continue to rise. According to on-chain data analysis firm Santiment, prices in the crypto market tend to move in the direction that most traders consider least likely.

When a large number of traders are bearish, it creates a situation where there is limited selling pressure, as well as a large number of potential buyers. This sets the stage for prices to continue rising.

Technical analyst Adrian Zduńczyk, also known as Crypto Birb, believes, based on his own observations and research, that the crypto market is in disbelief mode. He argues that many cryptocurrency traders “still struggle with cognitive dissonance and give very little thought to the recent reversal.”

In many cases, skepticism is fueled by past experiences of market cycles, where prices have risen only to ultimately fall.

More Earnings on the Horizon

Veteran trader Dave the Wave believes that as the crypto market takes off, some crypto influencers will have some explaining to do about “why they got caught napping.”

The analyst seems to disagree with Crypto Capo and Profit Blue, who remain convinced that a capitulation event has not yet occurred, which could push Bitcoin towards $12,000.

The former argues that a sustained drop below $22,250 could create the conditions for a market crash, while the latter believes a 55% correction is in the works for BTC.

Regardless of the recent price action and high levels of skepticism in the crypto market, Dave the Wave claims that Bitcoin is currently trading in the middle of a “buy zone,” based on its logarithmic growth curve.

This technical pattern suggests that there is a high probability that the price will continue to rise in the near future. Still, the overall price path remains upward. As the asset becomes more widely adopted, the number of people who own it and are committed to its success continues to increase.

Anyway, investors should approach the market with caution and be prepared for both the potential for profit and the possibility of loss.

By Audy Castaneda

China Ranks Second in the World for Patents in the Metaverse

Audy Castañeda
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<strong>China Ranks Second in the World for Patents in the Metaverse</strong>

For a researcher from China’s National Academy of Arts, the concept of the metaverse is still unclear and much clarity needs to emerge before its utility value can be established.

China now ranks second in global metaverse-related patent applications, with a nearly 30% share gathered through its 14,291 applications. This according to a report from the South Korean Intellectual Property Office.

China trails the United States, which has filed 17,293 applications. The data represent almost 36% of the total that covers the period from 2011 to 2020. South Korea ranks third with 7,808 applications, that is, 16% of the total.

Between 2016 and 2020, there were some 43,700 patent applications related to the metaverse and immersive content in the United States. This country was followed by South Korea, Japan, Europe and China. A curious fact is that the applications from Asian countries almost tripled with respect to those submitted in the previous five years.

The Metaverse Could Have Its “Golden Age” In China

In China, the metaverse is seen as a trending concept that loosely refers to an immersive virtual world, combining technologies such as virtual reality and augmented reality. Although still nascent, companies around the world have been making efforts to develop and invest in technologies related to the metaverse.

Another report by market consultancy Preqin said multiplicity of the metaverse is more likely than a shared global metaverse. Indeed, the Asia-Pacific region is more likely to see various local online worlds developed by various entities in China and South Korea.

The study further noted that from 2021 to November 2022, more VC deals were concluded in the AR and VR fields in China than in the United States.

He Chao, secretary general of the metaverse committee at the China Mobile Communication Association, an organization in Beijing, claims that the next decade will be a “golden age” for the development of the metaverse in China.

The Metaverse Interests Chinese Investors, but It Also Represents Risks

In November, the Ministry of Industry and Information Technology published a plan to grow the market size of China’s virtual reality industry. In financial terms, market growth was estimated to exceed 350 billion yuan (50.4 billion dollars) by 2026.

The plan called for more efforts to create foundational technologies that support immersive AR, VR, and mixed reality experiences. While the plan did not explicitly mention the metaverse, all of these technologies are complementary metaverse.

Sun Jiashan, a researcher at the China National Academy of Arts, said the metaverse as a concept is still unclear and a lot of clarity needs to emerge. If this doesn’t change it will be difficult for the utility value of the metaverse to be established beyond the current hype, which some fear. In some cases, investments in the metaverse could generate capital bubbles.

By Audy Castaneda

Bitcoin (BTC) Morning Analysis Feb 08th

Audy Castañeda
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<strong>Bitcoin (BTC) Morning Analysis Feb 08<sup>th</sup></strong>

Good news for the bulls: the golden crossover is here. Should we wait for a correction, or buy bitcoin (BTC) right away?

After Bitcoin formed a bullish pattern in the past few months, it surged and broke several resistance levels to hit a local high of $24,300 last week. This momentum culminated in a 50% rally in five weeks.

Meanwhile, BTC has seen a series of rejections since the price hit $23k on Jan 21, followed by $23.8k and others.

There is no doubt that Bitcoin has gained momentum and has performed impressively since the start of the year. In fact, its dominance has put the global market capitalization back above $1 trillion. The current setup looks exactly like the previous bull run. History is repeating itself.

The Bullish Cross of Gold is Here

On the daily scale the appearance of a bullish golden cross can be seen. This is a relevant signal that often signals the start of a very strong uptrend. So a bigger advantage for bitcoin (BTC) can be considered in the medium term. The closest targets are the psychological levels of $25,000 and $30,000.

However, one should not neglect the RSI, which is starting to break out of the overbought territory. Effectively, this shows that the bulls are losing steam. This could lead bitcoin (BTC) into a corrective move. In this case, it could be that the price may be going back to the $20,000 level. Therefore, the following is the ideal level to place a buy order:

Entry point: $20,000

Stop Loss: $19,000

Goal 1: $25,000

Goal 2: $30,000

There is still hope for a rise if Bitcoin can rally well above $23k. You would need to claim the $23,340 hourly dip level as resistance, followed by $23,800 and $24,255. The resistance levels of $24,678 and $25,200 are next if the price rises.

Key resistance levels: $23,340, $23,800, $24,255

Key Support Levels: $22,306, $21,552, $20,650

Cash price: $22,860

Trend: Bullish

Volatility: High

Bitcoin (BTC): Benefiting from a Possible Short-Term Correction

On the short-term scale, there could be a bearish scenario. That is because the daily RSI is starting to break out of the overbought territory. Therefore, a drop in bitcoin (BTC) could be seen in the coming days.

In such case, the $23,840 level looks like an interesting entry point. This is the 23.6% Fib level if the range between the high and the low of the previous week is considered. Therefore, the most likely scenario could be that the price rises to this level, before falling to $20,000.

As a side note, the Bitcoin price has managed to hold at $23k in the past week despite high-impact news from the US Federal Reserve. However, the bulls have shown signs of weakening with a possible reversal in the coming weeks.

By Audy Castaneda

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