No, it’s still not the end of NFTs

This is not the first time that the death of NFTs has been predicted. Still, non-fungible tokens are still doing well — and the excitement around them isn’t waning all that much.

The ” NFTs have stalled », according to the Wall Street Journal. For the worldthe market for crypto-art is running out of steam “. ” End of the digital Eldorado » on Culture Geekcollapse » at the Journal du Geekor “ plummeting sales » on La Fnac : on the web, many are those who give NFTs for dead. Is the NFT market really collapsing? In fact, not really.

NFTs have become a hot topic in 2021. These non funigble tokens, or non-exchangeable token, are backed by blockchain technology, and this is what allows them to act as certificates of authenticity. In ” mintant », that is to say by recording a computer file on the blockchain, it is possible to ensure its origin, owner, and rarity.

It is exactly for these reasons that NFTs gave rise to an art market that broke records at the beginning of 2021, with sales reaching several million dollars. Since then, sales of NFTs have declined, and many are calling them dead. Still, non-tradable tokens are set to stay.

Extremely popular cryptopunk NFTs // Source: larvalabs

What is going on ?

It is however true that the negative signals accumulate. On April 7, 2022, the owner of the very first tweet’s NFT put it up for sale. Bought for more than 2 million dollars the previous year, the NFT cannot find owners today and its price has dropped dizzily: the highest bid on May 9, 2022 is only $24,600.

The Wall Street Journal also explains in its article that NFT sales have fallen significantly: only 19,000 NFTs are sold per day, compared to 225,000 in November 2021. As for the number of wallets assets (i.e. people actively seeking to sell or buy NFTs), it is also decreasing: they were no longer 14,000 last week, compared to 119,000 in November, a drop 88% in just a few months.

For further

The Pope with an NFT from Bored Ape Yacht Club, because, why not // Source: Numerama

The specialized site Not Fungible, which studies the major trends in the NFT market and which published a study gathering the main figures for the first quarter of 2022 also noted some declines. Between the last three months of 2021 and the same period in 2022, the number of sales fell by almost half, and the number of buyers fell by 30.91%. In addition to the number of sales, it is the total value of transactions that is down: in all, between the 4th quarter of 2021 and the 1st quarter of 2022, sales fell by 4.60%, from more than 8, 2 billion to 7.8 billion.

Between the number of coins sold and their falling price, there are plenty of indicators to suggest that the NFT industry is not doing well. However, this is still far from being the case.

NFT Bored Ape Yacht Clun continued to break records // Source: PiggyBank / Unsplash
NFT Bored Ape Yacht Clun continued to break records // Source: PiggyBank / Unsplash

“Second-hand NFTs” are still popular

First of all, it’s not all bad news for the industry: the average price of NFTs has increased by 80%, showing that the vast majority of tokens continue to appreciate in value. The average time spent owning an NFT before reselling it is also increasing, showing that the market, while still speculative, is less choppy and unstable than last year.

These important indicators have not been taken into account by some observers, which distorts the overall image of the sector. Thus, it is also important to note that sales of what might be called ” second hand are on the rise and account for a larger share of transactions than ever before. This ” second hand market now accounts for 90% of traded value and approximately 70% of sales volumes, according to Non Fungible.

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At Paris NFT Day, the meeting place for NFT collectors // Source: Aurore Gayte for Numerama

Finally, as Non Fungible points out in its report, it is very important to indicate that ” 2022 trends confirm that, increasingly, the price of NFTs is decorrelated from that of cryptocurrencies “. While the value of bitcoin is still volatile, such a trend confirms that NFTs are increasingly seen as safe havens for cryptocurrency owners.

In a dedicated Discord, members of the site team explained that, “ although the number of active portfolios is decreasing, the number of buyers is still greater than the number of sellers “, which is, according to them, ” a sign that there is still interest in NFTs “. Moreover, ” with nearly $8 billion in sales in the first quarter. of 2022, we cannot really say that the market has collapsed “, they point out. ” We observe a stabilization of the NFT market, in line with what we noticed at the end of 2021.”

An excerpt from the study on NFTs carried out by Non Fungible // Source: Non Fungible
An excerpt from the study on NFTs carried out by Non Fungible // Source: Not Fungible

A market in “stabilization”

It should not be forgotten that, last year, the NFT sector grew extremely rapidly, attracting a large number of visitors and an equally large number of new projects. ” The NFT market is ‘digesting’ all the NFTs released in the last year says the Non Fungible report. The market, which had reached saturation and had chained records, is just beginning to regulate and stabilize.

If there is therefore a drop in NFT sales, it has not yet come the time to panic: it is not yet the end of NFTs, far from it. Last year, some observers were already predicting the death of these tokens, when the beginning of the second-hand market for NFTs was barely visible – and today, they are still there.

However, it is not because the market is stabilizing that price records have been reached. The popularity of collectible NFTs is still there, and it’s still impressive. The Bored Ape Yacht Club collection is the perfect example: monkeys are the most sought-after tokens of the moment, and they are snapping up impressive sums. Such is their popularity that when the Bored Ape metaverse project was launched, field NFTs sold out so quickly that transactions clogged the Ethereum blockchain for a time — proof that NFTs still have a lot to offer. good days ahead of them.

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No, it’s still not the end of NFTs

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