NFT Market in a Serious Decline: What Lies Ahead?
In a recent report by Bloomberg, it has been observed that the NFT market is currently facing a significant decline.
This downturn is marked by a substantial drop in trading volumes and a waning interest from investors. Notably, a well-known NFT collector, Daniel Maegaard, who operates under the pseudonym Seedphrase, has been downsizing his NFT collection in response to what he describes as a market that has taken a considerable hit.
Data sourced from DappRadar, as referenced in the Bloomberg report, reveals that between January 2022 and July 2023, monthly trading volumes for NFTs have seen an 81% decline. Concurrently, monthly sales figures have also dipped by 61%. Even established NFTs like Bored Ape Yacht Club and CryptoPunks have seen their floor prices reach lows not seen in over two years.
Lorenzo Melendez, who serves as the president of the NFT project Pudgy Penguins, shared with Bloomberg that market indicators are universally pessimistic. Both investors and sellers are grappling with the challenge of identifying lasting value within these digital assets.
While the broader cryptocurrency market has displayed signs of stability this year, the NFT sector has encountered difficulties. As per Bloomberg, NFT marketplace Recur is in the process of winding down due to unforeseen challenges, and Nifty’s, another platform, is also shutting its doors. Blur, a leading NFT marketplace, has experienced a staggering 96% drop in its sales volume measured in Ether between late June and early August.
Digital artists are not exempt from these challenges either. OpenSea, a prominent NFT marketplace, recently made royalties on secondary sales optional, causing concern among creators. Regulatory concerns are also rising, with the U.S. Securities and Exchange Commission taking its inaugural enforcement action against NFTs.
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Despite the overall market decline, Bloomberg highlights that certain segments of the NFT market are still demonstrating resilience. High-end artworks from renowned creators and low-value NFTs used in gaming contexts continue to enjoy demand. Nonetheless, the prevailing sentiment within the market remains pessimistic, with Melendez expressing, “I believe we still have to endure one more significant downturn.”
According to Bloomberg’s analysis, the decline in the NFT market can be attributed to various factors. These include a shift from a collector-driven market to one driven by traders and a decrease in the value of Blur’s native token, which has experienced a 32% drop over the last 30 days. As per their report, the term “NFT” itself is falling out of favor, with auction houses and projects now opting to refer to them as “digital art” or “digital collectibles.”
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
