NFT Sales Rapidly Falls To Lowest In 12 Months

Sale of Non-fungible tokens (NFT) has plummet amid the cryptocurrency crash. The NFT sales reached a 12-month low in June as the number of monthly NFT sales fell from above 5 million in 2021, to below 1 million in June 2022.

According to the crypto research firm Chainalysis [via The Guardian], the decline in NFT sales is definitely linked to the broader slowdown in crypto markets. Sales reached a peak of US$12.6 billion in January.

In 2021, users sent at least $44.2 billion worth of cryptocurrency to ERC-721 and ERC-1155 contracts, the two types of Ethereum smart contracts associated with NFT marketplaces and collections.

The cryptocurrency market, worth about $3tn last November, is now worth less than US$1 trillion.

NFTs rely on a blockchain to record who owns them and allow them to be traded. Most are based on the Ethereum blockchain, which is maintained through a carbon-intensive system called proof of work.

The demand for "Blue-Chip" NFT collections has held up, according to DappRadar, a firm that tracks NFTs and blockchain-based video games. NFT projects which show promise of providing long-term returns on their investments are considered blue-chip NFTs.

However, at more than US$42bn in NFT sales, the 2022 total has already exceeded the total NFT Sales of last year, which reached US$40 billion, according to Chainalysis. Sales in January and February accounted for more than half of the 2022 total so far.

Faith in crypto assets has also been shaken by the collapse of Terra, a so-called stablecoin whose value was supposed to be pegged to the US dollar, and troubles at crypto-related financial institutions such as the Celsius Network, a lender that has paused withdrawals.

The price of the cheapest NFT in the Bored Ape Yacht Club has declined by only 1%, to $90,00o, over the last month, according to DappRadar’s head of research, Pedro Herrera. “Blue chip collections are performing vastly better than the vast majority of NFTs,” he said, as per the report.

NFTs can store data on blockchains — with most NFT projects built on the Ethereum blockchain — and that data can be associated with files containing media such as images, videos, and audio, or even
in some cases physical objects. NFTs typically give the holder ownership over the data, media, or object the token is associated with, and are commonly bought and sold on specialized marketplaces.

NFTs have skyrocketed in popularity over the last year. NFTs are blockchain-based digital items whose units are designed to be unique, unlike traditional cryptocurrencies whose units are meant to be interchangeable.

Post a Comment

Previous Post Next Post
Like this content? Sign up for our daily newsletter to get latest updates.