The total market capitalization of nonfungible tokens (NFTs) has climbed to $9.3 billion, marking a 40% increase since July. The sharp rise is closely linked to Ethereum’s (ETH) strong rally, which pushed the cryptocurrency above $4,600 earlier this week.
Data from NFT Price Floor shows the market cap rose from $6.6 billion in mid-July to the current $9.3 billion. Since most NFTs are priced in ETH, a higher ETH price translates to higher U.S. dollar valuations for NFT collections, even if their ETH floor prices remain unchanged.
Ethereum’s Rally Fuels NFT Gains
Ethereum has been one of the strongest-performing large-cap cryptocurrencies in recent weeks. The token broke above the $4,000 mark in early August and continued to rally toward $4,600.
Analysts say the move has boosted sentiment across NFT markets, as dollar-denominated values for top collections jumped alongside ETH’s price.
Popular NFT collections, including Bored Ape Yacht Club, CryptoPunks, and Azuki, have all seen a boost in USD valuations. However, market activity in terms of NFT sales volume has remained relatively stable compared to the surge in market cap.
While ETH’s rally has delivered a significant boost to NFT valuations, market experts warn that the trend could reverse quickly if Ethereum prices pull back. Because NFT values are directly tied to crypto prices, any weakness in ETH could erase recent gains.
The latest rally highlights how closely NFTs remain connected to the broader crypto market. Investors looking to enter the NFT space are being urged to watch ETH price trends closely, as volatility in the underlying asset often leads to sharp swings in NFT valuations.
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