Things looked very different a year ago: NFT market trading volume is heading to a new 12-month low at $750 million. A trend that has been confirmed for several months. Trading volume has now fallen 95% since hitting a record high of $17 billion in January. After the highs of the NFT boom, the party mood finally seems to have died down.
Bored Ape Yacht Club diving
The fact that the market mood is cooling is particularly evident in NFT’s top notch collections: Bored Ape Yacht Club, CryptoPunks, Meebits. High-priced NFT series have recently lost much of their appeal. At 66 ethers, the price floor for a bored monkey hit a yearly low in August. It doesn’t look any better with the other flagships.
The blue chip index trend has corrected lower over the past few weeks and months. Also clearly visible here: Since April, the market capitalization of workhorses in the NFT market has been declining with a few outliers. The sentiment barometer determined by NFTGo using volatility, social media, trading volume and Google Trends is on “cold”.
searches go down
Google Trends also reveals that interest in NFTs was once higher. Search queries peaked at the end of January this year, and since then things have gone downhill. Search queries are currently back to the previous year’s level.
Easy game for NFT scammers?
As transaction volume continues to decline, the number of stolen NFTs has recently exploded. According to blockchain analytics firm Elliptic, between July 2021 and July 2021, $100 million worth of NFTs were stolen. In July alone, scammers seized 4,600 NFTs. Particularly popular: the Bored Ape Yacht Club. Since July last year, $43 million worth of NFT BAYC has been stolen.
The end of NFT fashion?
Falling trading volume, falling prices, falling searches: the snapshot looks bleak. The NFT market seems to be a victim of its own success at the moment: having risen too high in too little time, it is now taking its revenge.
NFTs are also highly correlated to prices in the crypto market, which is always hanging from stock market skirts. The downward spiral of markets accelerated by rising inflation, the energy crisis and the war in Ukraine also mark NFTs.
Nevertheless: NFTs should never be buried. The falling prices of Bored Ape Yacht Club and CryptoPunks luxury NFTs are mostly evidence of declining risk appetite. The speculators retreat and with them the expenses.
However, this does not change the enormous growth potential of NFTs. Web3, metaverse, blockchain gaming: the main use cases are still in the development phase. NFTs play a key role here, and the still young technology needs to be given time.
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