NFTs Outpaced Ether's Gains in January

Indexes tracking the prices of non-fungible tokens (NFTs) have risen almost 10% this month, outpacing ether (ETH), the cryptocurrency many are denominated in, which has gained just over 2%.

Nansen's $NFT-500 index, which tracks the 500 most valuable NFTs, has added 9.35% year-to-date, while the Blue Chip 10 is up a similar amount. Ether, according to CoinDesk Indicies data, advanced 2.2%.

In an interview with CoinDesk at Taiwan Blockchain Week, Animoca Brands founder Yat Siu 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 the speculators in the $NFT and GameFi space have left, which strengthened the foundation as the remaining people are genuinely interested," he said.

January's gains are unique because $NFT prices in ether initially did not keep up with the cryptocurrency's year-end advance. Traders, however, seem to have changed their minds as the hunt for utility, or real-world uses, is on.

The rally comes even as the average price of an $NFT has dropped 13% to $107, according to data from CryptoSlam. The number of transactions has risen 30% while sales volume is down 36% to $1.1 billion for the month. Wash trading, a form of market manipulation in which a buyer and seller collude to give the appearance of demand, accounts for 39% of all volume, according to CryptoSlam data.

Some $NFT-adjacent crypto sectors aren't doing so well.

The CoinDesk CoinDesk Culture & Entertainment Select Index (CNES), which includes metaverse tokens Axie Infinity, The Sandbox, and Decentraland, fell 22%.