The speculative hype that surrounded non-fungible tokens (NFTs) and surged through the cryptocurrency universe in 2021 seems long gone. In the early days of bullish hype, sales of NFTs such as Bored Ape Yacht Club and CryptoPunks and others were millions of dollars, including outlandish sales such as Beeple’s piece that sold, at auction to a Christie’s client, for $69m at the end of March. But, by the end of 2022, almost all market interest had evaporated. In September, roughly one year into the crypto crash, trading volume for NFTs dropped by more than 97 per cent, compared with NFT buying sprees earlier in the year. Prices and transactions were staggering, but they dropped equally staggering numbers.
Several factors, including oversaturation of the market with too many NFTs for a market that had not grown in proportion, an unremitting flood of scams, and a drop of confidence in economic prospects as major cryptocurrency platforms imploded and the fallout from COVID-19 and inflation brought a drag on the wider economy and recalibration of spending priorities all contributed to the steady fall in value of NFTs sending the market into sharp decline. By mid-2024, while there is still a market currently operational, it is at a much reduced scale. Even the so-called leading sites such as OpenSea saw a precipitous decline in users and sales.
The market chart still looks apocalyptic, but NFTs haven’t completely died. Some items sell at significantly higher prices than a year ago, including one-of-a-kind oddities or those owned by famous people – including Eminem (yes, Eminem), whose Bored Ape character sold for 116.7 ether a few weeks ago, according to OpenSea, nearly twice what it commanded in the summer of 2021, when the digital art phenomenon was at its peak. If the price of your NFT has fallen, you might be stuck with a digital variant of the beanie-baby of the mid-1990s. But in the end, the entire NFT phenomenon might be pivoting towards steadier, more sustainable models, perhaps more in tune with more realistic marketplace conditions and levels of consumer interest.
Source: Yahoo! Finance
