By Frances Yue
Hello! Welcome back to Distributed Ledger, our weekly crypto newsletter that reaches your inbox every Thursday. I’m Frances Yue, crypto reporter at MarketWatch, and I’ll walk you through the latest and greatest in digital assets this week so far. Find me on Twitter at @FrancesYue_ to send feedback or tell us what you think we should cover.
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Crypto in a snap
Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.90% recorded a 3.3% loss over the seven-session stretch, recently trading at around $43,044. Ether /zigman2/quotes/108573964/realtime ETHUSD +1.39% traded 6.1% lower from seven days ago at around $3,229. Meme token Dogecoin /zigman2/quotes/226077044/realtime DOGEUSD +1.52% is down 3% over the past seven sessions, trading at around $0.17, while another dog-themed token Shiba Inu /zigman2/quotes/231473891/realtime SHIBUSD +2.32% logged a 7.7% loss over the past seven days, trading at around $0.000028.
|Biggest Gainers||Price||% 7-day return|
|||||Source: CoinGecko as of Jan. 20|
|Biggest Decliners||Price||% 7-day return|
|||||Source: Coin Gecko as of Jan.20|
Non-fungible tokens, or NFTs, which refer to non-interchangeable digital assets stored on a blockchain, are seeing the boom continue, while the overall crypto market has been sluggish over the past few weeks. Major cryptocurrencies have seen losses over the past seven days, though most traded up Thursday .
The largest NFT marketplace OpenSea, which usually takes up more than 90% of the total NFT trading volume, saw its transaction volume on the Ethereum blockchain surpassing $4 billion so far in January, on pace to record its highest monthly volume in history, according to data from Dune Analytics.
“I think just in general, NFT is kind of uncorrelated with the greater digital asset space,” Eric Chen, co-founder of Injective, a decentralized exchange protocol, told Distributed Ledger in an interview.
Major cryptocurrencies, especially bitcoin, have been lately trading in tandem with stocks facing macroeconomic uncertainties, while NFTs are attracting growing mainstream attention, as companies and celebrities roll out their own NFT collections.
Most recently, Twitter launched a verification mechanism for NFT profile pictures available to some users.
Meanwhile, trademark filings show that retail giant Walmart is looking to create its own cryptocurrency and non-fungible tokens in a push into the metaverse. Gap Inc. recently launched NFTs of digital hoodie art, following Nike , Adidas and Macy’s , who already made moves into the NFT space.
Furthermore, NFTs got a boost in popularity when Facebook /zigman2/quotes/205064656/composite FB +0.99% changed its name to Meta in October to show its determination to build a Metaverse, in which NFTs are considered important components. Meta is also reportedly seeking to create its own NFT marketplace , according to the Financial Times citing several people familiar with the matter.
“This awareness from mass market brands is driving adoption,” Paul Judge, managing partner at crypto venture capital firm Panoramic Ventures said in an interview. The space has seen more newcomers and also more activities per user, according to Judge.
“On the one side, an NFT is a collectible, so you have people who buy it and hold it for a very long time. On the other side of the asset, you have people who trade it and have different frequencies of trading it similar to the stock market,” said Judge. “You almost have to compare [NFT marketplaces] on one side to Etsy /zigman2/quotes/202790087/composite ETSY +0.96% and eBay /zigman2/quotes/204653455/composite EBAY +3.09% . But then on the other side, you have to compare it to Nasdaq.”
OpenSea versus LooksRare?
Despite OpenSea’s predominant market share, the platform has been criticized by some for its centralized nature and relatively high transaction fee of 2.5%.
It might in part explain why the recent launch of LooksRare, an NFT marketplace that has a lower transaction fee of 2%, has stirred up some excitement. The platform also distributed 120 million LOOKS token, the native token of the platform, to OpenSea users to attract customers. In addition, LooksRare pays out the daily transaction fees it collected to users who stake their LOOKS tokens to incentivize more usage of the platform.
LOOKS is currently trading at around $6.84, up 14% over the past 24 hours, according to CoinGecko.
The mechanism seems to be effective. On Wednesday, LooksRare recorded a daily transaction volume of more than $800 million, compared to a daily volume of over $200 million on OpenSea, according to Dune Analytics. However, it has drawn doubts that LooksRare’s volume was inflated by wash trading , as some investors try to manipulate the rewards model by creating repeated large sales.