A few years ago, one non-fungible token (NFT) was sold at Christie’s auction house for $69.3 million in cryptocurrency. The purchaser pays to get his or her name registered on the blockchain as the owner of a digital file that anybody may see for free online. However, this strange and crazy market is exhibiting symptoms of slowing.
NFT prices’ rise and fall
Sales on OpenSea, the largest NFT platform, had surpassed about $5 billion in January, a massive increase from the $8 million a year prior, but have since fallen to roughly $2.5 billion.
According to market tracker CryptoSlam, over 635,000 individuals purchased an NFT last month, on average for $427, down from approximately 948,000 for $659 in January.
Pablo Rodriguez-Fraile, a Miami-based collector of digital art, said that clearly, the passion and curiosity that “we had during those times have waned,” adding that the participants have “accomplished something unsustainable.”
However, companies continue to pour money into the trendy “metaverse,” where digital assets such as virtual land and apparel for avatars can be purchased using cryptocurrency in the form of NFTs. This year, JPMorgan and HSBC created virtual venues in NFT-based worlds, while YouTube and Instagram also have NFT intentions.
Just stabilizing
For DappRadar’s director of finance and analytics Modesta Masoit, she said the industry was not in overall decline but rather stabilizing after its stratospheric expansion, following Russia’s invasion of Ukraine in late February.
She added the situation was expected since there would be a time of “consolidation,” and as a result “it’s not going away.”
According to DappRadar, overall NFT sales in 2022 have totaled $11.8 billion, excluding $19.3 billion worth of sales from a platform alleged to be controlled by irregular transactions, where a small number of accounts move things back and forth at inflated costs.
NFTs have a reputation for being strange and deadly creatures.