NFTs recorded only a 4% increase in global supply amidst reducing liquidity and declining crypto prices.
A new report shows the global NFT (non-fungible token) market noted a 25% drop in buyers, sales volume, and USD volume traded in Q2 2022. The decline comes amid bearish tendencies in the crypto and stock markets.
The sector recorded nearly $8 billion in NFTs resale and purchases between April and June-end. That was lesser than $10.7 billion during the Q1 ending. That’s according to nonfungible.com.
The company confirmed witnessing a historical bearish phase in Tuesday’s statement. It stated that liquidity remains deteriorated while the crypto value slump impacts prices. It added that NFTs and related activities aren’t profitable for the first time.
Non-fungible tokens are virtual avatars of collectibles and artworks. They can be in the form of virtual lands, digital work, domain names, or even video game weapons. The assets have their ownership recorded on a digital ledger or blockchain.
However, unlike currencies, where each token has an equal value and users can swap for another, NFTs maintain unique features that make them fungible or interchangeable.
NFTs in 2021
The NFT market flourished in 2021. For instance, Jack Dorsey’s initial tweet sold for close to $3m as an NFT, whereas the digital artist Mike Winkelmann hit news wires in March 2021, selling an NFT for $69 million.
DappRadar data shows NFT sales volume stood at $24.9 billion last year, surging from $94.9 million the year prior. NonFungible.com confirmed Collectible NFTs amassed most profits, while metaverse & utilities followed.
NFTs’ internet search volumes have plummeted significantly since the January 2022 peaks. The slump comes as the crypto market maintained a bearish regime. Nevertheless, interest has declined to September 2021 levels, perceived as the NFTs’ golden age at that time.
Nonfungible.com discovered South-East Asian nations recorded the highest searches of NFTs. Geopolitical worries amidst the Ukraine-Russia conflict took precedence over NFTs’ interest in Europe. However, South-East Asia (not impacted by the war directly) remained enthusiastic about the technology.
The average NFT price declined in Q2 from Q1’s $849 to $798. Plummets in crypto prices, especially Ethereum, impacted NFT average prices. ETH lost around 66% between April end and June end. NFTs value slumped by about 75% in that timeframe.
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