The 2022 bear market left many in the NFT ecosystem bruised and battered. Sales plummeted, prominent figures left, and consumer brands began to grimace at the thought of launching their own non-fungible offerings. But it seems the new year might’ve brought about some change.

As the new year rolled around, the NFT market is starting to trend upward. The global markets’ NFT sales volume is up 43 percent this month, according to data from Cryptoslam. With project floors on the rise, coin prices pumping, and open editions becoming all the rage, community sentiment has also been up in a big way. Of course, it isn’t just positivity moving the needle in Web3, but a statistical uptick propelling the NFT space forward.

However, before we get too ahead of ourselves with optimistic thinking, there are a few things that we need to consider before calling this a full-fledged bull market. So, let’s do some analysis of the markets to see what’s really going on and determine what projects — or other things — are driving this shift.

Are NFTs back?

First, we need to get one thing straight. For the Web3 collectors, artists, and builders who have been steadily grinding over the past few years, NFTs never left in the first place. Why? Because NFTs are far more than money or markets. They are an innovative technology that can be used for a host of purposes. So saying “NFTs are dead” is like saying “virtual reality is dead.” The markets may be down; however, the technology is very much alive and well — but I digress.

To those who only dabbled in Web3 or are on the outside looking in, NFT markets were largely dead, and now they seem to be on the rise yet again. The situation is majorly different this time around, though. In contrast with the NFT boom of 2021, the market has matured and become less of a wild west free-for-all.

To be frank, million-dollar sales and trades are happening far less often than they used to in the NFT space. But perhaps this is for the best. As with the waning of mainstream coverage and attention — which was often only focused on the financial aspect of NFTs in the first place — the NFT community went back to basics. In 2022, both creators and collectors were forced to reevaluate why they had become interested and involved in crypto-art in the first place.

It’s evident that a lot has changed in Web3 during the bear, and perhaps this most recent uptick is simply the market exhibiting this change as a result. Because according to the Dune analytics dashboard, OpenSea, having bottomed out at around $253 million in total ETH NFT sales volume in November (the lowest month since June 2021), has rebounded throughout January, reaching over $350 million in sales volume (with almost a full week still left in the month).

So why is OpenSea reporting its ETH NFT sales volume increase for the first time since April 2022? Is it a direct result of the recent ETH price increase, or is there something more to this market resurgence? The answer may surprise you. Or maybe it won’t…because we can point directly at the forces at play in this latest NFT pump. And it really does all start with ETH.

Why are NFTs pumping?

Any NFT collector worth their salt will readily tell you that, in the grand scheme of things, 1 ETH equals 1 ETH. That is to say that regardless of coin prices, crypto and NFTs will always retain value in some respect. It’s a common perception of the NFT space that pricing shouldn’t be the focus of the decentralized creative industry being created on the blockchain. And while ETH might make the weird wide world of NFTs go round, as previously noted, Web3 is about more than stacking coins.

Yet, these same collectors spitting values will also tell you that when the price of ETH changes, NFT prices change as a result. It’s the yin and yang of the blockchain, and it often goes one of two ways.

In the first case, ETH prices drop. As a result, folks start panic-selling their NFTs. This can lead to robust sales for a moment, but if ETH doesn’t recover in a timely manner or drops further, sales slow. See OpenSea monthly sales volume side-by-side with the price of ETH for reference. Although January 2022 was a record-breaking month for NFT sales (even with ETH prices halved compared to the prior month), things were different when the summer crash came around.

In case number two, ETH trends upward, potentially leading to a robust round of sales that breathes new life into the NFT space. This was part of the equation of the initial bull run of 2021 and could be happening now. But whether or not NFTs made ETH pump or vice versa the first time around depends on who you ask. In any case, though, it’s important to note that these two scenarios depend on NFT trend history over the past few years. Much has changed and is changing in Web3 and whether or not these trends will be experienced is anyone’s guess.

So, bull run incoming?

Beyond price action, though, one of the main driving factors of this current NFT pump comes from a few specific projects. Those in the NFT space actively innovating, creating, or otherwise helping the ecosystem sustain itself seem to be hitting stride. And one of the recent advents helping propel them forward isn’t really an advent of all. Instead, the resurgence of Bored Apes and, of all things, of open editions (OE) has the NFT space buzzing.

Open editions are a type of NFT release where, instead of minting and selling a limited set of identical NFTs, creators leave the bookend off and allow collectors to mint as many editions as they please — or cap it to a few per wallet and set a time limit for minting. Jack Butcher, with his influential Checks project, is one of the most prominent leaders in the recent charge for open-edition prosperity.

Starting out, Butcher’s OE sold over 16,000 editions for eight dollars each as a satirization of social media verification. After the OE closed, Butcher started tinkering with unique burn dynamics that would add value back to those who minted, and, adjacent to his efforts, the NFT space did its thing, introducing dozens of derivates to the market. Then, the trend caught fire, and subsequently, numerous creators decided to launch similar ventures of their own utilizing Manifold’s services to facilitate.

In January, the NFT space witnessed numerous creators, big and small, launch OE projects, and the numbers are still growing. Yet, while ETH pumping and open editions have been two defining factors of this latest NFT uptick, one that has been overtly carrying the entire ecosystem is the recently launched Bored Ape Sewer Pass.

As part of an ongoing new campaign centered around a new story arch called The Trial of Jimmy the Monkey, Sewer Pass NFTs became claimable in mid-January, driving over $20 million in secondary sales volume amid the launch of a competitive skill game called Dookey Dash. Considering the hold that Yuga and BAYC have had on the NFT ecosystem for going on two years now, it’s no surprise that NFTs happen to be pumping at the same time as yet another groundbreaking Bored Ape endeavor.

BAYC aside, what can the NFT space expect from this convergence of an ETH pump, OE resurgence, and Web3 brand initiatives? As 2023 Q1 continues and tax season approaches, the NFT space could very well become a strenuous place to be once again. For the short term though, this trend of rising prices and increasing vibes seems likely to stay.

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