NFT sales have taken a plunge by 90% since the past month. The decline in NFT sales has caused some observers of the space to cast aspersions on the durability of the space. Whether it is just a bubble or is this just a phase that will soon pass away? Only time would tell if the innovation will eventually prove these critics wrong.
The month of May took crypto enthusiasts by surprise when there was a massive dip in the crypto market similar to that of 2019. The price of Bitcoin took a hard hit by 50% percent dragging the prices of altcoins down. Obviously, this is due to BTC’s dominance since all altcoins answer to Bitcoin, the forerunner of cryptocurrencies. Unfortunately, the NFT space took a harder hit and plunged by 90% after the boom in the early days of May leaving users in a state of limbo.
In a report issued by Protos, it was observed that the NFT market may just be a bubble that would soon burst since sales across all usecases, whether arts, gaming, crypto collectibles, have continued on a downtrend.
Research on NFT marketplaces reveal that on May 3rd alone, about $102 million worth of NFTs were sold. Since the past week, NFTs sales totalled $19 million. Within a seven-day period, a total of $107 million worth of NFTs were sold, amounting to a 90% dump since then.
Activities on a daily timeframe recorded on NFT wallets also showed traces of a 70% decline since the beginning of May, after reducing from 12,000 NFT wallets to 3,900. The decline was observed on all categories of NFT ranging from gaming, DEFI, crypto collectibles like CryptoKitties, artworks, utility to metaverses and digital sport cards like NBA Top Shot.
Infact, Crypto collectibles recorded more purchases than any other category during the market boom- even until lately- although there has been a 66% dip following the decline since the past month. Sport-related NFTs, the second-most popular category withstood the decline than other categories following just 55% reduction in the number of active NFT wallets.
Non-fungible.com recent data reveal that crypto-collectibles (CryptoPunks) and sport tokens (Sorare) have processed most volume within the past week amassing almost 40% of the total volume on NFTs. Analysts in Protos argued that the NFT bubble has been punctured already. In their words, “All things considered, the data suggests the NFT bubble lasted just four months — and it popped about this time in May.”
What to Expect Following the Decline
The emergence of NFTs was met with mixed feelings, both of confusion and excitement, when it took the whole crypto space by storm at the start of the year, toeing the path of trends such as ICOs, tokenization, DeFi and yield farming in the crypto community. In addition, opinions are divided as to what the innovation of NFTs mean. Whether or not they are the most innovative technological invention to be launched in the blockchain industry. Some people think they hold no real usecase in the crypto community either now or in the future. Irrespective of what anyone thinks, the hype behind NFTs seem to be fading