Things looked very different a year ago, with trading volume in the NFT market heading for a new 12-month low of $750 million. A trend that has been visible for several months. Trading volume is now down 95 percent since hitting an all-time high of $17 billion in January. After the high points of the NFT boom, the festive mood finally seems to have subsided.
Bored Ape Yacht Club in dive
The cooling of the market mood is especially evident in the NFT blue chip collections: Bored Ape Yacht Club, CryptoPunks, Meebits. The expensive NFT series have lost much of their appeal recently. At 66 ether, the bottom price for a bored monkey reached an annual low in August. Things don’t look any better with the other flagship projects.
The trend of the blue chip index has corrected downwards in recent weeks and months. Also clearly visible here: Since April, the market capitalization of the draft horses on the NFT market has declined with a few outliers. The sentiment barometer determined by NFTGo using volatility, social media, trading volume and Google Trends is at “cold”.
Google Trends also shows that interest in NFTs used to be higher. Searches peaked at the end of January this year and have been going downhill ever since. Searches are currently back at last year’s level.
Easy game for NFT scammers?
While trading volume continues to fall, the number of stolen NFTs has recently skyrocketed. According to blockchain analytics firm Elliptic, $100 million worth of NFTs were stolen between July 2021 and July 2021. In July alone, scammers seized 4,600 NFTs. Particularly popular: the Bored Ape Yacht Club. Since July last year, $43 million worth of BAYC NFTs have been stolen.
The end of the NFT hype?
Falling trading volume, falling prices, falling searches: the snapshot looks bleak. The NFT market seems to be a victim of its own success at this point: it has risen too high in too short a time – it is now retaliating.
NFTs also correlate strongly with prices in the crypto market, which still hangs from the skirts of the exchanges. The downward spiral in the markets, accelerated by rising inflation, the energy crisis and the war in Ukraine, is also leaving its mark on NFTs.
Nevertheless: NFTs should not be buried under any circumstances. The price drop of the luxury NFTs Bored Ape Yacht Club and CryptoPunks is primarily evidence of declining risk appetite. Speculators are withdrawing and with it costs.
However, this does not change the enormous growth potential of NFTs. Web3, metaverse, blockchain gaming: the main use cases are still in the development phase. NFTs play a key role here and you need to give the still young technology time.
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