Ethereum Rally, Not an NFT Craze, Pushes the NFT Market Cap to $9.4 Billion

The NFT market capitalization has surged 40% since July, reaching a remarkable $9.4 billion at the time of writing, according to from NFT Price Floor.

But this isn’t a new NFT craze; analysts say the surge is almost entirely driven by the powerful rally in the price of Ethereum, which has reached almost 100% since the first week of July.

New to NFTs?

Linking NFTs’ valuation to Ethereum’s price is logical, considering that most NFTs are based on the Ethereum mainnet, with their sales and valuations denominated in ETH. Hence, the recent push above $4,000, which triggered more bullish momentum for Ethereum and pushed the price above $4,600 at the time of writing, is having a significant effect on the NFT ecosystem.

In fact, the top 10 NFT collections by market cap are all Ethereum-based. This explains just how central the Ethereum network is to the NFT ecosystem and why most traders watch ETH’s price to gauge the health of the digital art sector. It also shows why most NFT traders and investors use Ethereum price movements and developments around the Ethereum network to gauge the digital arts sector and monitor NFT trends.

The OG NFT chain.

According to NFT Price Floor’s data, CryptoPunks remains the NFT collection with the highest market cap. The collection boasted a valuation of 526,900 ETH, equivalent to approximately $2.4 billion. CryptoPunks had a weekly volume of 4,200 ETH worth around $20 million. Meanwhile, the collection recorded a total of 90 sales during the week at an average price of $217,331 per NFT.

Bored Ape Yacht Club (BAYC) is the second-highest ranked NFT by market capitalization. According to NFT Price Floor’s data, the BAYC collection’s value was $602 million at the time of writing, while the Pudgy Penguins collection ranked third with a total valuation of $591 million.

Notably, the recent surge in Ethereum’s price is having an industry-wide effect that signifies the blockchain’s widespread reach and its link with various sectors of the cryptocurrency industry.