Demand for non-fungible tokens (NFTs), records on blockchains that act as title deeds, has plummeted, The Wall Street Journal reported. “There is still strong demand, but there are changes,” the sector said.
NFTs refer to digital or physical objects and are found on blockchains where data is stored around the world in a way that, in principle, cannot be manipulated. NFTs can be traded. Sales are down 92 percent this week to 19,000 tokens from a high of 225,000 in September. This was reported by The Wall Street Journal based on data from the specialized website NonFungible. The number of active crypto wallets fell 88 percent from a high of 119,000 in November to 14,000 last week.
- The number of NFTs traded has plummeted over the past week, according to figures cited by The Wall Street Journal.
- Other sources point to changes in the market, which itself would continue to grow.
- Buyers now pay more attention to the community behind a project, its iconic value and the benefits it offers.
The article also gave painful examples of extreme loss of value. The NFT from Twitter co-founder Jack Dorsey’s first tweet was sold in March of last year for $2.9 million. When the owner wanted to sell it earlier this year, the highest offer was about $14,000. He has not accepted it.
Since the beginning of this year, the value of the NFT market dollar has also been under pressure, linked to fears of higher interest rates and the impact of the war in Ukraine. The prospect of higher interest rates weighs on growth sectors, as evidenced by the price performance of the Nasdaq technology exchange.
The big spike in sales this past weekend comes from crypto token maker Yuga Labs Bored Apes Yacht Club, which sold $320 million worth of virtual land. That selloff nearly crashed the Ethereum blockchain on Saturday.
The Cointelegraph site has previously talked about a consolidation of the NFT market. Dune Analytics data would indicate a strong market with a much higher number of users and transactions. The popular OpenSea marketplace is said to have recorded almost $550 million in volume on Sunday alone.
There may be a discrepancy in the numbers due to the influence of Axie Infinity. That video game is based on NFT and had become very popular. But volumes have recently dropped considerably.
Data from blockchain data company Nansen would indicate that a change is taking place. Established and expensive brands like Bored and Mutant Ape Yacht Club would far outweigh the crypto tokens associated with art or gaming.
Much more money flows into high value collections or all sorts of perks and into games that are played frequently.
venly the flamingo blockchain technology provider, has a direct view of the market. It offers wallet systems, digital wallets in which users can manage their NFTs and cryptocurrencies. Those wallets have more than 2.5 million users. “There is a consolidation where volumes and transactions continue to increase. The money goes much more towards high-value collections or all kinds of perks and games that are played often,” says Marketing Director Yan Ketelers.
‘In the beginning, suddenly everyone was doing NFTs and almost everything was being speculated on. There was fomo, fear of missing out. It’s over. NFTs are no longer simply bought,” says Ketelers.
According to him, the value depends on the community behind the project, among other things. It could be a digital club, like Bored Apes, or a soccer club. The CryptoPunks collection has iconic value. Lastly, we look at ‘utilities’ such as access to events, collections, games, or community forums. ‘The NFT Moondbirds collection broke all records. So there were all kinds of advantages associated with it,’ says Ketelers.
“The number of wallet users will grow. That’s 100 percent safe,’ says Ketelers. Brands are also increasingly making portfolio creation easier, with companies like Venly stepping in. ‘NFTs are a fad, but also a rapidly growing application,’ concludes Ketelers.