According to blockchain tracker DappRadar, non-fungible token sales fell precipitously in the third quarter as cryptocurrency investors prepared for a “crypto winter” and the market for the highly speculative digital assets shows little sign of picking up.
NFTs are a type of blockchain-based asset that stands in for a digital file like an image, video, or object in an online game. As wealthy crypto-speculators raced to profit from soaring prices, their popularity skyrocketed in 2021.
Unfortunately, because of the broad market collapse, which caused many non-fungible tokens to lose more than 70% of their floor prices, sales of these digital assets have fallen down significantly. Even Bitcoin, the most valuable cryptocurrency asset, was not immune to this market downturn; it is currently selling at $19,000 compared to $69,000 in November.
A blockchain data aggregator called DappRadar reports that NFT sales in the third quarter of 2022 were $3.4 billion, down from $8.4 billion in the second quarter and $12 billion at the market’s peak in the first quarter of the year. These numbers reflect a drop of almost 60% in Q3,2022.
A blockchain data aggregator called DappRadar reports that NFT sales in the third quarter of 2022 were $3.4 billion, down from $8.4 billion in the second quarter and $12 billion at the market’s peak in the first quarter of the year.
Since 2021, when the NFT market benefited from rising cryptocurrency prices and investors’ appetite for high-risk investments, these conditions have significantly deteriorated as central banks raise interest rates in an effort to raise revenues and support economies in the face of recent high inflation.
OpenSea, the largest NFT marketplace, reported declining sales for the fifth month running in September.
Devin Finzer, CEO of OpenSea, which is backed by investors including a16z, said, “I think what’s unique about this environment is it’s the intersection of both the macroeconomic downturn and the crypto winter.”
“The previous crypto winters were a little more isolated to just crypto prices, so I think it’s wise to be conservative about how long this could last.”
Devin Finzer, CEO of OpenSea, which is backed by investors including a16z, said, “I think what’s unique about this environment is it’s the intersection of both the macro economic downturn and the crypto winter.”
However, he said that the company is in a “good financial spot,” and he expressed excitement about the long-term potential of NFTs, referring to the current recession as a “building phase.”
According to market watcher NonFungible.com, the number of weekly NFT buyers has more than halved since late January.