Party over: NFT market in crisis

The first tweet in NFT form raised $2.9 million for its creator, Twitter inventor Jack Dorsey. That was March last year. The same NFT is for sale again, current high bid: $133. No sign of a heat wave, the mood in the NFT market is near freezing. And that cooling was badly needed.

NFT voting hole

Bear market, crisis, crash: whatever you call it, the crypto market has seen better days. Bitcoin continues to struggle near the 20,000 mark, Ethereum slips suspiciously close to $1,000, with a third remaining from a record high of $3 trillion in total market cap. The war in Ukraine, inflation and energy shortages have left their mark on the financial markets and the crypto risk game in particular has had to lose its feathers.

And the NFT market? A comparable overall picture: in the record month of January, the trading volume was still 17 billion dollars. Last month: $1 billion. In July, trading volume across all marketplaces could fall below the $1 billion mark for the first time in a year.

“definitely not dead”

Sobering figures, cause for concern? Not at all, Gopi Kannappan, Chief Product Officer at NFT startup bitsCrunch, told BTC-ECHO. “The volume of the NFT market certainly slowed down in June 2022, but this is largely due to the factors of the global economy and not an isolated problem of the NFT market,” said the expert. “Other metrics, such as developer activity and the number of new users in the NFT ecosystem, have grown steadily, even in the tough global economic environment.”

The NFT market is “dynamic” but “definitely not dead”. It’s all a matter of perspective: “If we zoom out and look at the quarterly trading volume, we see that Q2 2022 trading volume was four percent higher than Q4 2021 trading volume on Ethereum.” At the same time, “all other global financial markets showed negative growth”.

Those who are declared dead live longer

What is observable in the NFT market is not so much the gradual end of a technology. It is the bursting of a bubble inflated by speculators. Not everyone seems convinced that the cultural-historical status of the first tweet is comparable to that of the Mona Lisa, as buyer Sina Estavi was lyrical at the time.

This is not just a tweet! I think years later people will see the real value of that tweet, like the painting of the Mona Lisa.

Bridge Oracle CEO Sina Estavi acquired the first tweet as NFT in March 2021

Moving away from the bling-bling hyped meme pictures and making room for down-to-earth projects – the NFT identity crisis could also be an opportunity. Art, Web3, Metaverse: the potential applications for NFTs are not diminishing, on the contrary. The technology fulfills many bridging functions in digitization. NFTs seem to be entering the mainstream even faster than cryptocurrencies. The social media world around Instagram, Twitter and Meta, formerly Facebook, has long been trying to integrate them.

However, the oversupply is also fatal to the market, at least if NFTs are sold as an investment. They are not, at least not in bulk. There is no shortage of growth potential and opportunities to use NFTs wisely. Do tweets count? Doubtful.

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