After a record period, sales of non-fungible tokens are at an all-time low.
Collapsing prices, bankruptcies… The year 2022 is a punchy year for digital assets, such as Bitcoin. And this period, dubbed the “crypto winter”, does not spare NFTs which are facing a drop in value and volume.
By definition, “NFT” is the abbreviation of the English term “Non Fungible Token”. It means in French “non-fungible token”. Unlike tokens such as Bitcoin or Ethereum which are fungible, therefore equivalent to each other and undifferentiated, NFTs are “non-fungible”, therefore unique.
The curve plummets
The last positive curve appeared last April. Remember, the sale of the new project of Yuga Labs, the studio of the famous NFT Bored Ape Yacht Club, had succeeded in congesting the Ethereum blockchain. At that time, sales of 61,000 NFTs brought in an average of $83 million. Since July, that figure has fallen to $29 million and sales are plummeting. While the number of sales amounted to 3.9 billion dollars in May, there were more than 884 million in June and around 626 million in July. This is the lowest figure for a year.
“Most indicators are down in the second quarter of 2022, without much surprise given the global economic context. Major metrics are down around 25%, which is a relatively modest decline compared to cryptocurrency trends”, says the report of the site NonFungible for the second quarter of this year. He nevertheless specifies that, for this period, the average price of NFTs experienced a very slight drop of only 6%, while crypto-currencies were almost divided by 3.
A monopolistic tendency
According to the report, CryptoPunks, Meebits and the Bored Ape Yacht Club family alone account for 30% of the USD volume traded in the global NFT market. “It therefore seems that a centralization of the market is taking place around the projects held by Yuga Labs for this first quarter of 2022”note NonFungible.
Overall, very few new NFTs were issued this quarter, “with an overall supply growth of only 4%”, says the report. Falling prices, superimposed on falling volumes in the NFT market, made it more difficult to generate profits. Thus, the profit on resale decreased by 46% during the second quarter of 2022. The total loss increased by 23% and as a result, the issuance of new NFTs slowed down. In figures, we are talking about 1.8 billion US dollars of profit for 1.4 billion US dollars of loss. The collectibles segment is the most affected.
For now, “OpenSea remains the market leader, with monthly volume of $484.79 million in July”, reports The Block. But it is not spared by the crisis. Indeed, it went from a total of almost 5 billion dollars in sales in January to 686 million in June. Moreover, the NFT sales platform announced the dismissal of 20% of its workforce on July 14, 2022.
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