Despite a 92% drop in sales of NFTs, is this really the whole story?
To put it another way, the NFT enthusiasm appears to have petered out, as investors and innovators become more reasonable in their approach to the market. NFT sales fell by a whopping 92% between September 2021 and April 2022, but is this the end of the story? Is this all there is to the story, or is there more?
As a refresher, non-fungible tokens are digital files kept on a blockchain that limit access to previously freely shared and duplicated art files. Let’s review this definition once again: More information on NFTs can be found in our article, What Are NFTs? It’s a new technology that many artists have taken use of in order to truly take charge of their work.
Crypto statistics site NonFungible reports a 47% drop in transaction volume in the first quarter of this year compared to the same period last year. This is an indication that reality is beginning to set in on a technology and market that have been over-hyped and under-utilized for some time.
NFTs may be over, but it doesn’t mean they’re gone. This month saw a 91% increase in NFT trading volume on the Solana blockchain with $500 million in trading volume, while the Moonbirds NFT project added $500 million worth of activity.
Overall NFT trading is slowing, but for many artists who have invested in the NFT space, this can’t come soon enough – read our interview with VFX supervisor Bilali Mack who believes that NFTs need a reset so that new uses, experiments, and entrepreneurial ideas can bring better value and true democratization to this digital technology. Read more.
Like the dot.com bubble in the late 1990s, many NFT companies are on the verge of going bust. One curve ends and another begins, and this new boom could be the one that truly sees NFTs emerge as something noteworthy.
NFTs should be able to break free from the volatility of the bitcoin market, allowing more people who are used to using fiat currency to participate. Many people will undoubtedly move from Ethereum to the Solana, Wax, and Flow blockchains, which are known for their stability, environmental consciousness, and economic viability (see how NFT tips can help with this), as well as an increase in the number of NFTs with real-world applications. You can see how these all differ in our NFT crypto tutorial.
If we’re being honest, this isn’t the first time we’ve wondered if NFTs are done. How NFTs are perceived and utilized, particularly by artists, may be significantly altered in the future, however. Many in the NFT area should welcome the end of the hype, since the next phase of development might be very interesting.