NFTs
Prices Still Falling for the NFT Market
The NFT market is still in deep crisis, with prices far removed from those of the boom.
Although July is not over yet, there are only two days left, so the first conclusions can already be drawn.
The collapse of volumes and prices in the NFT market
The NFT market boom occurred during 2021, with peaks reached in January 2022.
According to CryptoSlam dataIn January 2021, the total monthly trading volume of NFTs on the market exceeded $100 million for the first time.
A year later, in January 2022, they had risen to over six billion dollars, or sixty times more.
After this incredible growth, which lasted a year, there followed a long period of decline, which is still ongoing.
The minimum peak of monthly trading volumes in 2022 in NFT Marketplace was recorded in October, with less than 600 million dollars, which represents a drop of more than 90% in less than a year.
However, 2023 was even worse, with a drop to $300 million in September.
By the end of 2023, however, it seemed to be recovering, with a high above 1.7 billion dollars in December, but at that point, a new decline began that saw monthly volumes return to around 400 million.
So while the worst post-bubble month for now remains September 2023, the roughly $400 million this July is significantly lower than the worst month of 2022.
The end of 2023 turned out to be just a passing phenomenon.
Buyers and sellers
Crypto Slam also measures how many active public addresses are on the NFT exchange market.
In January 2021, there were very few, so much so that this data must now be considered completely out of date.
As of April 2021, however, there were just under 500,000 addresses active in both buying and selling.
At its peak in January 2022, active seller addresses had climbed above one million, while buyer addresses were approaching one and a half million. While these are all-time highs, they still don’t seem like particularly significant numbers. This means that even during the last big bubble, this was still just a niche market.
Also in this case, the post-bubble low was reached in late 2023, with less than 500,000 sellers in November and less than 540,000 buyers in October.
In this case, however, the recovery occurred in 2024 and appears to be holding.
In February of this year, sellers surged to over 800,000, with buyers rising to over 1.2 million. What’s more curious, however, is that in July, so far, there have been just under 370,000 active seller addresses, while those of buyers have remained at just under 980,000.
Current NFT Market Prices
Despite the sharp drop in sellers and the relative stability in the number of buyers, prices are low again.
The point is that retail sales have probably declined, but those of the original producers have remained high.
Buyers have declined much less than their annual peak in February, but they have still declined. And that is why volumes have remained low despite the high number of buyers.
While this picture does not seem at all comforting, on the other hand, the resilience of the number of buyers suggests that there may be room for a new recovery.
It is worth noting that during the second quarter of 2024, ending in June, volumes decreased by 45% compared to the first quarter of the year, falling from 4.1 billion dollars to 2.24 billion.
In the beginning, to tell the truth, there was a significant increase, mainly in the number of transactions, which went from 5.7 million in June to 9.9 million transactions. This further certifies that the average price has fallen.
The future of the NFT market
Despite everything, the NFT market still seems to have a future.
In a recent interview, CryptoSlam founder Randy Wasinger stated that NFTs are not dead and that, like all digital assets on the blockchain, they are here to stay.
The key point at this stage is rotation between different sectors.
Wasinger does believe that some applications of NFTs, fueled by previous cycles of enthusiasm, may never return, but other use cases could reach new heights and bring the market back to previous levels.
One use case that could disappear is the profile picture (PFP), which may never regain the level of adoption it had a year or two ago.
Instead, other use cases, such as those in Web3 applications, may continue to evolve positively.
Wasinger said:
“I don’t know if this will necessarily translate into large sales volumes as in the past, at least in the short term, but I anticipate that it will manifest itself in perhaps higher transaction volumes.”