Crypto is crashing, but the top 100 NFT collections have mostly sustained their value. Here’s why

Bitcoin and Ether, the two biggest cryptocurrencies, have lost nearly half their value since reaching all-time highs in November, while the top 100 most valuable NFT collections have seen smaller losses, and some have even gained in value, according to a study by DappRadar, a data acquisition and analysis company that tracks the NFT industry, first reported by The Defiant, a media startup focused on decentralized finance. 

The top 100 NFT collections together lost 15% of their value in the same period that the two most popular cryptocurrencies dropped nearly 50%, according to an analysis by DappRadar. It ranked the top 100 NFT collections by multiplying the cheapest NFT in a collection by the number of collectibles available in a series: for example, the price of the cheapest Bored Ape Yacht Club NFT multiplied by 10,000, the number of cartoon apes that exist in the collection. 

NFTs, or non-fungible tokens, are a kind of digital collectible whose ownership is recorded in a decentralized public ledger. They skyrocketed in popularity in 2021, with one NFT from the artist Beeple selling for as much as $69 million. From the start of last year through mid-December, the NFT market surpassed $41 billion, according to a report by Chainalysis, a blockchain analysis company.

NFTs and cryptocurrency are often considered intertwined. You need cryptocurrency to buy NFTs, and both crypto and NFTs use the digital ledger known as the blockchain to show proof of ownership of an asset. But NFTs themselves are not a digital currency, as each one is unique. And the disparity in value between crypto and the top NFT collections shows that they may be increasingly operating in distinct markets. 

Pedro Herrera, a senior blockchain analyst at DappRadar, who contributed to the report, told Fortune that factors such as artificial scarcity for collections and the use of NFTs in blockchain-based games are helping to keep prices of these digital collections high. He singled out celebrity endorsements in particular as something that is helping NFTs grow and achieve mainstream appeal. 

“If you extrapolate this to all collections, the social reach of celebrities is massive, and it’s going to be an important step in the search for mass adoption,” Herrera said.

In 2021 celebrities purchased NFTs from a number of valuable collections: Bored Ape Yacht Club owners, for instance, now include Jimmy Fallon, Eminem, Paris Hilton, and most recently Justin Bieber, who bought one of the collectibles for 500 ETH or about $1.3 million.

If NFTs consistently hold their value in the long term, it suggests NFTs could be a “store of value,” like gold, something that investors can put their money into during a downturn in other markets.

Although the top 100 NFT collections depreciated as a whole, some popular collections saw a boost in their dollar value, even though the currency they are usually purchased with, Ether, has lost value.

Bored Ape Yacht Club, Mutant Ape Yacht Club, World of Women, and Doodles have all increased in dollar value since November, according to the report. Of those four, the Doodles collection, which was created in October last year, saw the biggest increase in its U.S. dollar value—223% since November. 

Although the top collections appear to be holding their value even when cryptocurrency as a whole has taken huge hits, the NFT market has been plagued by scams and bad actors in recent months. OpenSea, the most popular NFT marketplace, said last week that 80% of the NFTs created through its free creation tool are spam, scams, or fraudulent. 

Yet Herrera said that like any other industry scams exist but that many NFT projects are genuinely trying to create something original and cultivate relationships with fans.

“There is always a Ponzi scheme,” he said. “There are always people to scam. But on the other hand, there are projects like the ones discussed that are trying to build for the community.”