Non-fungible tokens were on fire last year. A lot of artists, athletes, celebrities and big retailers are maximizing blockchain technology. They do this by hawking digital versions of themselves. However, recent buzz around NFTs is starting to fade. The sales of NFT fell by a sharp 47% in the first 3 months of this year.
“The general public seems to be losing interest in NFTs, if the search volume on Google is to be believed,” the group said in a report.
NFT Sales Volume Slides Down
An NFT gives its owner a proof of ownership of a digital object. Or access to services based on a unique code on the blockchain that is linked to an image or video.
Because they are unique, NFTs can be transferred or sold or divided into smaller parts. Some people buy an NFT in the hope its value will rise. Others buy them strictly for bragging rights or to participate in an emerging tech trend.
According to non-fungible tokens researchers a lot of NFTs were bought this year. Through March this year, customers spent $7.8 billion buying or selling NFTs. Researchers say that this shows NFT markets aren’t collapsing as much when compared to its 2021 rise.
“Volumes are down, but prices are up,” the report concluded. “In other words, the NFTs that remain in circulation are recognized as being truly valuable.”
Fewer Players In The NFT Game
Despite the recent involvement of big stars like Cristiano Ronaldo in the NFT space, the industry is still lagging behind on players. The major reason for this cooling interest in NFTs is the cryptocurrency crash.
Investors are skeptical about losing their money in Crypto related activities. This includes buying and selling NFTs.
Another reason, according to Merav Ozair, is the reduction in purchasing power of NFTs. Reduced value of cryptocurrencies will grossly affect how much NFTs people will be able to buy.
Bitcoin price peaked at $68,000 in November last year. The coin is now down by 56% since the beginning of the year. Solana, Ripple, and Ethereum are also taking a hit as investors take cover from cryptocurrency.
Some experts also believe that the frequency of thefts and scams in the NFT space has also caused harm. It has dampened the enthusiasm for NFTs.
Amid the growing hoopla last year, some NFT sold for millions of dollars. This garnered national headlines with each transaction. Tech enthusiasts watched as a collection of NFTs from Bored Ape Yacht Club featuring flashy cartoon ape depictions sold for top dollar. The entry bid for a Bored Ape NFT was 52 ether in January 2022. The equivalent at the time of $210,000, according to CNET. Buyers included celebrities such as Jimmy Fallon, Steph Curry and Post Malone.
“Everyone was chasing the FOMO,” Ozair said.
No Regrets In NFTs Purchase
Many NFT owners bought their tokens last year and in 2020. They did this hoping to see their value continuing to surge. However, they now realize that’s not the case.
Although for some NFT owners, it was never about cashing in. Connor Murphy said that he purchased two NFTs in 2020 just to support the artist who created them.
“My NFTs could go to $0 and I would not regret my purchases or see less value in them personally,” Murphy said. “That’s where many others make the mistake. They enter this space to try and make money, whereas I have entered this space to try and make a difference.”