📈💻📉Are Non-Fungible Tokens Price Performance Correlated To The Crypto Markets?

Quick note - I have been receiving amazing feedback from the NFT community for pushing out content but I have also been told I am filling up people’s mailboxes! I understand the email inbox is sacred so I am now going to limit sending out newsletters to only once or twice per week. I will try to consolidate any blogs, podcasts, and other content, into fewer emails. Today we have a podcast, short NFT updates from my new segment “NFT Scene” and a blog post about NFTs correlation to the crypto markets.

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Zima Red Podcast - Jiho -Advancing The NFT Frontier (Click Here)

My guest today is Jiho. The co-founder and head of growth at Axie Infinity. Not one to follow the well-trodden path, Jiho blazes his own trail. 

Whether he's creating a successful NFT project or integrating DeFi into gameplay mechanics, Jiho sets a furious pace of constant innovation. 

We covered a multitude of topics during our conversation but the recurring theme was to focus on the fundamentals: Listen to the community, always innovate and create a great experience for the users.

Please enjoy my conversation with Jiho.

Axie Infinity Website

Axie Infinity Starter Guide

Jiho Twitter

NFT Scene - Jan 22, 2020

This short section gives you the rundown on the latest happenings in the NFT scene.

  • 🚀RocketNFT - Get a loan against your NFTs!

  • 🖼$13,000 sale price for the first-ever tokenized art piece on SuperRare.

  • 📈DCL Blogger releases amazing NFT trading resources.

Twitter avatar for @DCLBloggerdclblogger.eth @DCLBlogger
Starting 2020 with a Rebrand! Check out the new
dclblogger.com for, - NFT Trading Case Studies - Tutorial Videos - Project Reviews & Explainer Vids - Weekly Project Analysis Reports - And a LOT MORE! Send anyone that wants to learn about NFT's this way :) Image
  • ⚔️Axie live-streamed their tournament (with $3,100 worth of prizes at stake).

📈💻📉Are Non-Fungible Tokens Price Performance Correlated To The Crypto Markets?

Image result for correlation

(Image Source - https://www.mathsisfun.com/data/correlation.html)

Huge shout out to Dan and Zoup at Nonfungible.com for providing the market data used in this blog. Nonfungible.com is an amazing resource for the NFT ecosystem, with everything from detailed NFT data to great blog posts. Visit them here.  

2019 was an incredible year for the NFT ecosystem. NFT user numbers increased, $USD volume increased, and numerous new projects entered the space. Blockchain technology presents such a clear use-case for digital items that I believe games and collectibles may be blockchains first “killer app” (the first widespread application of blockchain technology). But even with this exceptional performance, I have been plagued by a question...

Are NFT Markets Correlated With Crypto Markets?

Does the NFT market only perform well when the overall crypto market is performing well? I constantly wonder if there is a correlation between the NFT market and the broader crypto market. We will attempt to answer that exact question by examining Cryptopunks, CryptoKitties, Decentraland, and Cryptovoxels. I chose these projects since they give a reasonable overview of the current NFT market. I say “reasonable overview” because these projects have a wide variation in asset volume, sales volume and lifetimes.  

*Note that“asset sales” refers to NFT assets within a game or environment and “$dollar sales price” refers to the $USD amount for NFT assets.

  • Cryptopunks: Launched in mid-2017. Has low asset sales volume but steady $dollar sales price.

  • CryptoKitties: Launched in late 2017. Has a mix of high asset sales volume with high $dollar sales price and high asset sales volume with low $dollar sales price.

  • Decentraland: Not yet launched, per se, but their NFT assets have been on sale since 2018. Decentraland has steady asset sales volume with high $dollar sales price.

  • Cryptovoxels: Launched in mid-2018. Has steady asset sales volume and medium $dollar sales price.

Correlation Explainer (Copy and pasted from Investopedia)

“The correlation coefficient is a statistical measure that calculates the strength of the relationship between the relative movements of two variables. The values range between -1.0 and 1.0. A calculated number greater than 1.0 or less than -1.0 means that there was an error in the correlation measurement. A correlation of -1.0 shows a perfect negative correlation, while a correlation of 1.0 shows a perfect positive correlation. A correlation of 0.0 shows no relationship between the movement of the two variables.” - investopedia.com

Crypto Market Data

To roughly gauge the health of the overall crypto market, I inspected the average daily price of bitcoin. As the most dominant cryptocurrency, bitcoin has always had a strong correlation with the wider crypto market. It’s market dominance has never dipped below 33%

NFT Market Data

I considered two numbers regarding NFT data; first, the average sale price and total sale amount (in $USD). 

  1. Average Sale Price: This is the average $USD price of NFTs sold in a day. Consider that 10 CryptoKitties could be traded in one day with the average $USD price of $2, while the next day just 1 CryptoKitty could be traded and the average $USD price may still be $2. 

  2. Total Sale Amount: This is the total $USD amount for assets traded in a day. If 50 CryptoKitties traded in one day, each for $2, the total $USD amount is $100.


I collected the average sale price and total sale amount for Cryptopunks, CryptoKitties, Decentraland, and Cryptovoxels from their specific launch through October 31st, 2019.


During this process I discovered that the methodology I used was flawed, so please take these numbers with a grain of salt. NFTs are privately traded assets and there is no “public” price of NFTs, thus it is quite difficult to obtain accurate numbers to compare with bitcoin. For example, I could buy a CryptoKitty for $1m dollars and that would skew the rest of the results because CryptoKitties do not typically trade at those prices. Regardless we have to make do with what data we have.

After inspecting the average sale price and total sale amount, I concluded the total gives better results. However, I believe the best method to observe the correlation between NFT markets and crypto markets is to record total $USD spent in the NFT markets over a given timeframe and compare it with the average $USD price of bitcoin. (I can’t take credit for this idea, it was Dan’s suggestion!)

I’ll touch on this more below, but in the next iteration of this post, I hope to also run the correlations with ETH instead of just BTC. Until then, let me provide my somewhat flawed findings!

Correlation Key  

-1.0 = perfect negative correlation 

-0.5 = moderate negative correlation 

0 = no correlation   

0.5 = moderate positive correlation

1.0 = perfect positive correlation 

Variables - Average Daily BTC Price and Average NFT Sale Price 

CryptoPunks = 0.20 - weak positive correlation 

CryptoKitties = 0.52 - moderate correlation 

Decentraland = 0.00 - zero correlation 

Cryptovoxels = 0.43 - moderate correlation 

Variables - Average Daily BTC Price and Total NFT Sale Price 

CryptoPunks = 0.04 - essentially zero correlation  

CryptoKitties = 0.37 - weak positive correlation 

Decentraland = 0.06 - essentially zero correlation

Cryptovoxels = 0.33 - weak positive correlation 

The data indicates that there is basically no correlation between the NFT market and the bitcoin market. I’m sure this comes as no surprise to those that have been in the NFT market since the start, but it was great to derive data-based confirmation. 

Going Forward

While I suppose this is an alright first step towards discovering the correlation coefficient between bitcoin and NFTs, as mentioned above, I would also love to consider the correlation between Ethereum and NFTs, especially because the majority of NFTs are priced in ETH. Perhaps the next iteration of this blog post will give a more accurate picture by examining the total $USD across the top ten NFT projects and comparing that to BTC and ETH. 

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