No, it’s still not the end of NFTs

This is not the first time the death of NFTs has been predicted. Even so, non-replaceable tokens are still doing well – and the excitement around them isn’t diminishing all that much.

the ” NFTs are stuck the Wall Street Journal reported. For Le Monde, the market for crypto art is running out End of the digital Eldorado » on Culture Geek, ” to collapse » in the Journal du Geek, or even « declining sales on La Fnac: On the web there are many who give NFTs for dead. Is the NFT Market Really Collapsing? Not really.

NFTs have become a hot topic in 2021. This one non-exchangeable tokens, or non-exchangeable token, are backed by blockchain technology, and this is what allows them to act as certificates of authenticity. In ” coin », that is, by including a computer file on the blockchain, it is possible to guarantee its origin, owner and rarity.

Precisely for these reasons, NFTs created a record-breaking art market in early 2021, with sales of several million dollars. Since then, sales of NFTs have fallen and many are calling them dead. Still, non-tradable tokens will remain.

Extremely Popular Cryptopunk NFTs //Source: Larvalabs

What is going on ?

It is true that the negative signals are accumulating. On April 7, 2022, the owner of the NFT from the very first tweet put it up for sale. Bought last year for more than $2 million, the NFT can’t find owners today and the price has fallen staggeringly: the highest bid on May 9, 2022 is just $24,600.

The Wall Street Journal also explains in its article that NFT sales have fallen significantly, with only 19,000 NFTs being sold per day, compared to 225,000 in November 2021. walletIts assets (ie people actively looking to sell or buy NFTs) are also declining: they were no longer 14,000 last week, compared to 119,000 in November, down 88% in just a few months.

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The Pope with an NFT from Bored Ape Yacht Club, because why not // Source: Numerama

Specialized site Non Fungible, which studies key trends in the NFT market and published a study of key figures for the first quarter of 2022, also noted some declines. Between the last three months of 2021 and the same period in 2022, the number of sales fell by almost half and the number of buyers by 30.91%. In addition to the number of sales, it is the total value of transactions that is declining: in total, turnover decreased by 4.60% between the 4th quarter of 2021 and the 1st quarter of 2022, from over 8.2 billion to 7.8 billion.

Between the number of coins sold and their falling price, there are numerous indicators that indicate that the NFT industry is not doing well. However, this is far from the case.

NFT Bored Ape Yacht Clun continued to break records // Source: PiggyBank / Unsplash
NFT Bored Ape Yacht Clun continued to break records // Source: PiggyBank / Unsplash

“Second Hand NFTs” Are Still Popular

First of all, it’s not all bad news for the industry: the average price of NFTs has increased by 80%, showing that the vast majority of tokens continue to appreciate in value. The average time spent owning an NFT before it is resold is also increasing, showing that the market, while still speculative, is less choppy and unstable than it was last year.

These key indicators have not been taken into account by some observers, which distorts the overall picture of the sector. So it is also important to note that the sale of what could be called ” second-hand are emerging and accounting for a greater share of transactions than ever before. This one ” second hand market now accounts for 90% of traded value and about 70% of sales volumes, according to Non Fungible.

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On Paris NFT Day, the meeting place for NFT collectors // Source: Aurore Gayte for Numerama

Finally, as Non Fungible points out in its report, it is very important to point out that ” Trends in 2022 confirm that the price of NFTs is increasingly correlated with that of cryptocurrencies While the value of bitcoin is still volatile, such a trend confirms that NFTs are increasingly seen as safe havens for cryptocurrency owners.

In a special Discord, members of the site team explained that, ” although the number of active wallets is decreasing, the number of buyers still exceeds the number of sellers “, which according to them is,” a sign that there is still interest in NFTs “. Moreover, ” with revenue of nearly $8 billion in the first quarter. from 2022 we can’t really say the market has collapsed ‘, they note. † We see a stabilization of the NFT market, in line with what we noticed at the end of 2021

An excerpt from the NFT research conducted by Non Fungible // Source: Non Fungible
An excerpt from the NFT research conducted by Non Fungible // Source: Non Fungible

A market in “stabilization”

We should not forget that the NFT sector grew very fast last year, with a large number of visitors and an equally large number of new projects. † The NFT market ‘digests’ all NFTs released in the past year ”, explains the report from Non Fungible. The market, which had reached saturation and chained records, is just beginning to regulate and stabilize.

So should there be a slump in NFT sales, now is not the time for panic: it is far from the end of NFTs, far from it. Last year, some observers already predicted the death of these tokens, when the beginnings of the second-hand market for NFTs were barely visible – and today they are still there.

However, it is not because the market is stabilizing that price records have been reached. The popularity of collectible NFTs is still there, and it’s still impressive. The Bored Ape Yacht Club collection is the perfect example: monkeys are the most sought-after tokens of the moment and they are picking up impressive sums. Their popularity is such that when the Bored Ape metaverse project was launched, field NFTs sold out so quickly that trades hid the Ethereum blockchain for a while – proof that NFTs still have a lot to offer.

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