It’s been a rough couple of months for the crypto market, and the NFT market has been feeling the heat too. Floor prices of major NFT projects have declined drastically, and people considered NFT millionaires just a couple of months ago seem to be hanging on at this point. This has made us ask- is the golden age of NFTs over?
What are NFTs?
NFTs which stand for Non-Fungible Tokens are anything digital that are unique and cannot be replicated. They come in various forms like art, music, poems, videos, GIFs and more. They are bought and sold for cryptocurrency.
In the year 2021, we witnessed celebrities, artists, and big-name retailers joining the NFT wave, but it seems like the NFT hype is slowly dying down and we have the downturn in the crypto market to blame for that
The NFT Market Affected By The Decline of The Crypto Market
The second quarter of the year 2022 saw a decline in asset resales. According to a report by Nonfungible.com, it was revealed that there was a significant decrease in Q2 compared to Q1 2022 which recorded a net profit of US$460M. Q2 recorded a net profit of US$460M.
According to NonFungible, during the first quarter of the year, NFT sales dropped 47% globally compared to the previous quarter.
“The volume of internet searches around the NFT theme has actually dropped very significantly since the peak in January 2022,” said Nonfungible.com.
In a statement by NonFungible, it was revealed that customers spent $7.8 billion on NFTs through March. According to researchers, the NFT market isn’t collapsing so much as it is settling down after a meteoric rise in 2021.
In the report, it was concluded that volumes were down, but prices were up. As a result, NFTs that remain in circulation are considered valuable.
In a statement by blockchain expert Merav Ozair, who teaches financial technology at Rutgers University, he mentioned that the recent cryptocurrency crash is a major reason behind cooling interest in NFTs. He added that it’s due to fact that buyers often use BTC, ETH, or other cryptocurrencies to buy NFTs, and declining crypto prices reduce their purchasing power.
Is This The End of NFTs?
As earlier said, researchers concluded that the NFT market isn’t collapsing so much as it is settling down after a meteoric rise in 2021, and NFTs still in the market are seen as valuable.
Will the NFT market rise to how it used to be? That is hard to determine now but we are looking forward to how it all plays out.