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NFT Interest Grows as Volumes Lag, Bitcoin Hovers as Dollar Jumps

Nov 17, 2021 · 4 min read

By Joo Kian, and Genevieve Yeoh

OpenSea Volume Lags NFT Search Interest

  • Worldwide Google searches for “NFT” hit new highs in November even as OpenSea’s volumes remain relatively stagnant; we have seen a bit of an uptick in recent days but volumes are still well below late summer highs.
  • The continued rise in search interest suggests NFTs are far from dead and may even be an early indication that another wave of activity is on the horizon. At their peak, there was a daily influx of NFT projects dropping left and right, so the disconnect in volume could imply less speculative hype and greater focus on projects with strong, growing communities. There’s only so much attention and demand among crypto enthusiasts so eventually constant drops and short-term flipping was going to lose a bit of steam, especially as more participants started to experience the downside of buying high and selling lower.
  • With that in mind, it is observable that there are less NFT mintings in this cycle, which can lead to less secondary market trading activity and, therefore, lower volumes on marketplaces like OpenSea.
PFP NFTs Climb as Star-Studded Owners Buy In

  • Selected Profile Pictures (PFP) NFTs have soared the past week as BAYC gained traction from some big stars purchasing and promoting their new apes.
  • Bored Ape Yacht Club (BAYC) was the highlight in the past week as Jimmy Fallon came aboard (pun intended), Post Malone featuring his ape in his new music video (from 0:15) and NBA all-star Ruby Gobert showed off his ape. This spilled over to Mutant Ape Yacht Club (MAYC) as it is a cheaper alternative where floor prices soared over 130% since the start of November.
  • Other notables include Doodles, which boasts a strong community and is backed by a treasury where NFT holders can vote on proposals, and Creatures, which were featured as one of the projects that Coinbase NFT teamed up with for drops.
BTC Still Has Room to Run

  • MVRV, which measures the ratio between BTC’s market cap and realized cap, is a far cry from prior highs, including BTC’s local price top in late Q1 early Q2 2021; prior BTC cycle tops saw much higher peak MVRV levels, which indicates BTC still has more room to run.
Dollar Jumps as Rate Hike Expectations Pulled Forward

  • The dollar has been rallying versus most major currencies since June’s FOMC meeting, hitting a 16-month high on Tuesday on the back of strengthening economic data and growing expectations for tighter monetary policy on the horizon; the Citi U.S. Economic Surprise Index is trending higher after spending nearly four months in negative territory.
  • The market is currently pricing in a ~75% probability of at least one Fed rate hike by June and a 100% probability of at least two rate hikes by December 2022.
  • While there are a fair amount of risks associated with a stronger dollar, the more critical read through is what the dollar’s recent strength implies. A stronger greenback would have you believe the same tailwinds that propelled global asset prices – including BTC and crypto – over the last 18 months are starting to reverse course, and that assumption wouldn’t be entirely misguided (stay tuned for our latest market report dropping this week for more detail).
Notable Tweets

Potentially the First On-Chain Merger?

Staples Center -> Arena

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