Transaction volumes of non-fungible tokens (popularly referred to as NFTs) have declined to the lowest, below $1 billion, in the last year. NFTs which are digital collectibles typically artworks such as bored apes have seen sales drop over the last weeks, failing to reach the $1 billion milestone for the first time since June 2021.
According to data tracker DappRadar, the NFT market hit its first month of sales being under $1 billion for the first time since last year. This follows a series of declines and challenges that have plagued the cryptocurrency market.
This crypto market-induced decline has affected NFT marketplaces terribly. OpenSea, the world’s biggest NFT marketplace has seen its sales volume declined 75 percent since May and is on the course to setting a new record for its lowest sales level.
The top NFTs which were in huge demand have also seen their prices decline. Some Otherdeed NFTs, which were in such high demand at their May launch that they clogged up the Ethereum network, have seen their price floors slip by about 30 pecent in the last 30 days. Bored Ape Yacht Club’s (BAYC’s) blue-chip NFT collection has also declined by almost 33 percent in the same time, according to data from NFT Price Floor shows.
It is relevant to know that NFT trading volume in the second quarter of this year declined by 64 percent. Compared to the first quarter, digital collectibles or NFT waned off in the second quarter of this year, compared to the first and the same period from the previous year.
The JPG NFT Index which tracks a handful of blue-chip NFT projects is also down by over 70 percent since it launched in April this year. The collapse of Terra blockchain’s stablecoin, the bankruptcy of lenders such as Celsius Network and Babel Finance, and investors waning interest in crypto-related projects have all contributed to this.
According to Pedro Herrera, DappRadar’s Head of Research, “Without question, the NFT market has fallen off the cliff this June. While the market is way more mature, it is fair to say that in recent weeks, investors were looking for safer places to put their money amid the Terra collapse and the rumors surrounding potential liquidations.”
“Much of the craziness was bled out of NFTs and they are going through a period of consolidation. I suspect they will survive, but on a much more sensible basis than at the height of the mania,” Aaron Brown, a crypto investor, and writer for Bloomberg Opinion said.