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The Non-fungible tokens (NFT) market was glorious last year. Many artists, A-list celebrities, influencers, and sports persons used it as a fan engagement platform to empower the general public. The NFT market's upturn started in early 2021 and maintained its fame until May 2022 with a healthy and supportive crypto market and positive investor sentiment. However, the boom around the NFT space has not managed to stand its ground as sales drastically plunged to one-year lows with the downward turn of the crypto market.
The performance of the NFT ecosystem in June 2022
According to NonFungible.com, the total number of daily NFT sales in June 2022 fell to around 19,000 with an estimated value of US$ 13.8 million, which was recorded in June last year. The NFT sales in April 2022 were US$ 1,754 and plummeted to US$ 412 in June. In addition, the monthly sales volume released by OpenSea, an NFT marketplace, was drastically reduced to US$ 700 million in June from around US$ 5 billion in January. These numbers are a mere representation of the NFT market collapse. Falling prices of Ether (ETH), unrealistic gas fees, and lack of secondary market demand are a few key factors negatively influencing the hype around NFTs. According to industry experts, Ether has dropped around 71 percent in the last six months, whereas bitcoin lost around 57 percent.
Trends in sales of top NFT projects
The NFT Index that tracks the performance of non-fungible tokens, weighted based on each token's circulating supply, fell about 23 percent in June 2022. Moreover, the floor prices of top NFT projects such as Bored Ape Yacht Club (BAYC), CryptoPunks, Mutant Ape Yacht Club (MAYC), Yuga Lab's Otherdeed, and CloneX have bombed significantly in recent times. For instance,
Challenges in trading of NFTs during crypto bear market
People often buy NFTs of artwork for millions of dollars when the market is booming, but reselling those NFTs during bear market conditions leads the sellers to huge losses. For instance,
Though the future of NFTs is uncertain with the ongoing fluctuations in cryptocurrencies, industry experts are claiming that the influence of NFTs on the art market will end. However, researchers expect NFTs to revolutionize the gaming industry by providing attractive options to players, such as in-game assets, including weapons, armor, and avatar skins. In addition, crypto entrepreneurs such as Changpeng "CZ" Zhao are helping governments to use NFT use cases as IDs for citizens. Furthermore, the Social media platform Facebook has recently announced its plans to support NFTs for creators, initially starting with creators from the United States. More and more initiatives from such social media platforms and crypto companies will positively influence the NFT market from a short- to medium-term perspective.
To know more and gain a deeper understanding of the global NFT market, click here.
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