Falling floor prices and sell volume indicate that the NFT market has perished

• The news has been dominated by high-profile NFT sales, but a closer look reveals that the vast majority of NFTs are worthless and the market is extremely illiquid
• A recent Bloomberg analysis based on OpenSea data revealed that 73.1 percent of NFT assets had only one transaction in the previous 90 days
• Several NFT marketplace indicators, such as the dollar worth of completed sales, active market wallets, primary market sales, secondary market sales, unique buyers, and unique sellers, show a similar trend pattern

The news has been dominated by high-profile NFT sales, but a closer look reveals that the vast majority of NFTs are worthless and the market is extremely illiquid. Investors who owned CryptoPunks and other projects minted before 2018 were ultimately rewarded for their patience as nonfungible tokens (NFTs) dominated crypto and mainstream media headlines throughout 2021. Meanwhile, some of the rarer items from recent initiatives like the Bored Ape Yacht Club and Art Blocks Curated have sold for millions of dollars. Despite million-dollar sales for select one-of-a-kind NFTs and record-breaking sell volumes on marketplaces such as OpenSea, data reveals that the bulk of lower-priced NFTs and lesser-known projects on the market do not accumulate value, implying that the industry is illiquid. 

A recent Bloomberg analysis based on OpenSea data revealed that 73.1 percent of NFT assets had only one transaction in the previous 90 days. Gauthier Zuppinger, the COO of Nonfungible, told Bloomberg that maybe 90% of collections produced today are absolutely worthless and meaningless. Zuppinger says of successful NFT investing, ninety-nine percent of it is about being in the right circle at the right moment and having the correct knowledge. You live with the daily frustration of missing out on a $1 billion opportunity in the NFT space. The amount of transactions being conducted on marketplaces provides more indication that the NFT industry has dropped substantially from its August highs. The number of daily sales across all NFT markets has decreased from a high of 138,109 on Aug. 30 to 42,372 on Sept. 21, according to Nonfungible statistics.

Several NFT marketplace indicators, such as the dollar worth of completed sales, active market wallets, primary market sales, secondary market sales, unique buyers, and unique sellers, show a similar trend pattern. According to Bloomberg, the most actively traded 3 percent of collections accounted for 97 percent of all dollar volume, implying that the NFT market is functioning similarly to the larger altcoin market, in which a tiny proportion of tokens get the majority of trading traffic. Overall, these trends imply that the NFT sector’s most recent bull cycle may be coming to an end and that it will take some time before liquidity in the NFT market improves significantly, especially given the current market slump.

Steve Anderrson

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.