An icy cold winter has descended on NFTs, where monthly trading volumes of $6 billion have dropped to below half a billion.
“This is the lowest level recorded for the year, following a continued decline since April 2022,” says Michelle Hutchison in presenting a new report The Balthazar NFT Marketplace Update.
The average value of an NFT sale has dropped from $1,580 in January to just $146 this September.
Yet the NFTs market cap overall seems to be holding alright. Down from the peak of $35 billion in January, but still a somewhat stable $22 billion.
“The NFT space is continuing to grow at a macro level,” says John Stefanidis, Co-founder and CEO of Balthazar. “We’re seeing so many more applications for NFTs across different industries. People are getting more creative in innovating with NFTs.”
The Bored Ape Yacht Club (BAYC) NFTs, one of the biggest by market cap, seems to have held its value.
This continues to trade at a somewhat stable sum of 78 eth ($100,000), down from the peak of $400,000 but mostly because eth’s price fell.
The drop in volumes however has been severe, even in eth. For NFTs as a whole, they’ve plunged from 1.27 million eth in April, to now ◊120,000.
OpenSea, the largest NFT marketplace in the world, recorded $268 million in trading volumes last month, down by $109 million or almost one-third from August.
The first NFT bear is thus turning out to be freezy indeed, but Stefanidis is upbeat. He says:
“We’re seeing more people learning about NFTs, more projects are adopting NFT technology and investment is still flowing into the space. As a result, this is strengthening the market for the long-term.”
Only time will say whether he will be proven right, but the fact some of these NFTs are holding their value, may well be a good sign.
There’s still plenty of interest, with the number of OpenSea users halved since January, but still at 780,000 for September.
A significant amount therefore appear to be sticking to NFTs. In the midst of bear, however, there’s obviously the question of whether they will keep sticking, and most crucially whether there will be another NFT bull to stick to.
If there is, then a new asset class would be born, the very first since bitcoin itself: digital art or crypto tangibles in a tongue in cheek, or NFTs of course.
They’re different from any other asset, and through this bear we may well see just how different as they may be a bit more sticky, although of course it is far too soon to say.