Nft Hype Cools Down, Market Volumes Hit Lows Since July
The weekly market volumes of non-expendable chips (NFT) plunged to their lowest level since July 2021, according to a report Nonfungible.com, a site that manages data related to CLS.
NFTs are assets that give people ownership of digital files of real-world items such as art or music. According to the “sales made” chart on Nonfungible.com, NFT’s weekly sales volume in the market has dropped to around $176 million. That’s about five times less than the weekly trading value of about $924 million as of January 31. In the first quarter of 2021, NFT sales had totaled approximately $2 billion.
It is not only transaction volumes, retail investors do not look much CLS Web than they were to October last year, according to Google Trends data search .
But does that mean the popularity of the once foolproof NFTs is fading?
Over the past couple of years, NFTs or non-fungible tokens have taken the world by storm. The digital artworks were selling for millions of dollars. Some of the biggest global brands were looking to incorporate NFTs into their business models. Even Bollywood stars were jumping on the digital asset bandwagon. Therefore, the current drop in trading volumes is a big surprise, raising eyebrows among investors around the world.
Lowest weekly market volume in nine months:
Due to the current global affairs, the broader crypto market has taken a heavy hit. And with it, the NFT market also seems to be taking its fair share of damage. Trading volume is a critical metric that indicates the health of the NFT market, and it has declined significantly.
Transaction volume refers to the number of NFT transactions performed on different blockchains over a specified time period. As the trading volume increases, more NFT assets are traded, indicating growing interest in the asset. And when the trading volume decreases, it usually indicates low interest in the asset.
As the overall cryptocurrency market is highly volatile, it is difficult to give a specific reason for the decline in trading volumes in the NFT space.
During a similar downward trend in NFTs in June last year, Geoff Osler, CEO and co-founder of the NFT app S! NG, said CNBC that “pent up demand” could boost the popularity of digital collectibles because there was money accumulated from the rising prices of crypto-currencies.
Crypto prices crashed after Russia invaded Ukraine. Bitcoin, which is trading below $39,000, is less than half the price it peaked at in November last year.
The environmental cost of minting NFT has also been a hot topic of debate in recent months. The huge amount of computing power needed to maintain the operational NFT market contributes significantly to global warming. And this could be another reason why investors give up. Or it could be simply that the hype of a speculative asset like the CLS or by shutting down after a period of excitement for a new technological innovation.
However, this loss of interest may be temporary, as widespread adoption of NFTs continues to increase as companies and institutions find a way to incorporate NFTs into their business models.
(Edited by : Priyanka Deshpande)
First post: STI