Digital assets are going through a difficult period: drop in sales, drop in collected sums, drop in prices, drop in the number of sellers and buyers… Could this finally be the end of NFTs?
Autumn is spectacular. NFTs, these digital certificates of authenticity that were bought at record prices just a few months ago, are nowhere near as popular as they once were. The aggregate data from The Block media and published on 30 July 2022 show the extent of the phenomenon: NFT sales, all platforms combined, are in sharp decline.
While a few months ago the sale of a new NFT collection by the Bored Ape Yacht Club had literally blocked the Ethereum blockchain, tokens are now suffering the “crypto winter”. And the trend looks set to last.
A market in crisis
“ The winter of cryptocurrencies is the nickname given to the very difficult period the market is going through. In addition to the decline in prices for months, the cryptocurrency sector has also faced several impressive collapses: that of the Earth ecosystem, which brought with it 50 billion dollars, and the failures of Celsius and 3 Arrows Capital.
Until June, however, the NFT sector had been quite spared from the phenomenon, as data from The Block show: sales were still high. The collapse in sales really happened in June. While sales were $ 3.9 billion in May, they dropped to just $ 884 million a month later. OpenSea, the leading NFT sales platform, is the only one that manages to stand out in the lead, while the others have almost disappeared from the data. It’s simple: it’s been a year since sales figures have been this low for NFTs.
These are not the only data showing that the market is going through a difficult period. The NonFungible site, which collects data from different platforms, published its analysis for Q2 2022 on July 26 and its conclusions are also negative. He estimates the market has seen a 25% drop in sales value, a trend that could last for a while.
” It is not just the total sales value that has decreased notes Non Fungible in its report. ” This also applies to the number of buyers and sellers and the number of sales. All indicators are red: the number of active portfolios, profits and the average selling price. The only green figure is not exactly good news: the number of contracts has increased simply because there are more NFTs than there was a year ago, and the average length of ownership of an NFT has increased, because they are more difficult to resell.
As for the declines in sales, they can be largely explained by the fact that many NFT collections have lost appeal since the beginning of the year, in favor of the more well-known ones. ” CryptoPunks, Meebits and Bored Ape Yacht Club now make up 30% of all sales volume ”, According to NonFungible. As these three collections belong to a single entity, Yuga Labs, we are really seeing a concentration of the market.
So, would this be the end of NFTs? After being wrongly predicted once in 2021 and then again in May 2022, the end of NFTs has never seemed so close. However, you shouldn’t immediately bury the non-fungible tokens : Although the speculative market is coming to an end, there are still uses for the technology, most notably through the Ethereum Name Service and through some metaverse projects.