NFT market crashes but adoption continues

NFT sales are down. Despite the market collapse, there are more and more holders of non-fungible tokens. In addition, brands continue to show their interest in the sector.

The non-fungible token (NFT) market has boomed in the past year. According to data provided by DappRadar, the platform that tracks all blockchain data, sales volume reached $24.9 billion in 2021. A year earlier, sales were still just $94.9 million. dollars.

28.6 million wallets traded NFTs in 2021, compared to just 545,000 in 2020. Sales peaked in August 2021 before declining in September, October and November. The market temporarily picked up some color last December.

NFT sales continue to decline

In 2022, weekly sales have stabilized under $250,000. Last year, however, sales regularly exceeded the $250,000 mark. Trading briefly picked up again in late April, peaking above $350,000.

Since then, sales have continued to contract, according to data from the media The Block. During the month of May, the decline in transactions even accelerated. Sales of digital works certified on the blockchain are down 70% compared to January.

The decline in sales is related to cryptocurrency market crash. Since early May, the market has been in the red. Many observers believe that the sector has entered a new bearish phase. As is the case in traditional finance, this sluggish market is driving investors away from riskier assets, such as NFTs. Unsurprisingly, investors, cut off from a large part of their funds, prefer to turn to less risky investments, such as stablecoin staking.

In this context, many NFTs lose value. This is the case of Jack Dorsey’s first tweet on Twitter. Bought for $2.9 million in 2021, it is now only worth $29 on the OpenSea platform.

More and more NFT holders

Despite the drop in transactions, more and more blockchain wallets hold NFTs. On the site of Into The Block, a specialist in crypto indicators, we can see that the number of digital wallets that have non-fungible tokens continues to progress.

More than 5% of addresses have digital works. There are more and more NFT holders around the world despite the drop in sales. Furthermore, the number of NFT collections continues to grow, regardless of the number of sales. It should also be noted that firms specializing in NFTs also continue to attract investors. Yuga Labs, the startup behind the Bored Apes, raised $450 million in March, bringing its total valuation to $4 billion.

At the same time, well-known companies are entering the world of NFTs. This is the case ofeBaywhich launched its first non-fungible tokens on its auction site, publishing houses DC Comics and Marvel Comics or several luxury brands (Gucci, Prada…). Recently, Meta also added NFTs to its Instagram social network, which should further accelerate their adoption.

Source :

The Block

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NFT market crashes but adoption continues

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