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- The cryptocurrency market has been inflicted with a huge amount of damage and has shed $500 Billion from its market cap.
- NFT market is the initial space to go down as a collateral damage. Euphoria around the sphere has cooled down recently.
- NFT sales volume by May has approximately equaled previous year’s entire total of $40 Billion.
Weakening NFTs
In a weekly update by a researcher Lucas Outumuro, discussed a recent plunge NFT market has witnessed. He highlighted in the study that the ‘furthest elements in the risk element are being crushed.’ In spite of initiating the year on a high, NFT sales volume has diminished spectacularly.
For instance, BAYC has plunged by a huge 60%. As per the report, acquiring an NFT 4 weeks ago would have given an outcome in a loss or around a quarter million dollars.
This coincides with a plunge in Ethereum prices, which is the major crypto asset where NFTs are traded. However, ETH is diminished by just 30% during May, while the majority of NFT collections have shedded half of their value.
With a sharp drop in trading volumes and prices, there was a plunge in social sentiment regarding NFTs. Similar to the sales volume, Google searches regarding the term NFT have plunged by 75% since its ATH in January.
What Experts Have To Say On This?
Transactions since previous summer have come in “fits and starts,” as per a report from Chainalysis. Couple of spikes in particular are accountable for pushing the activity of NFTs.
Initially, it’s the release of MAYC in August. Second is the release of the latest NFT marketplace LooksRare that escalated things quickly during January and February.
Block Journal’s CEO David Hsiao says that market for virtual assets appears bleak in upcoming days, and he wanted to restrict the damage by selling now,
Furthermore, he said that, he anticipates the NFT sphere to suffer due to diminishing prices of crypto assets, alongside the conditions such as inflation, the prospect of escalating interest rates, the pandemic and Russian invasion in Ukraine.
He concluded that, if we somehow enter the recession genuinely, NFTs will be the initial ones to go down.
He added that, Folks are not gonna value art, especially in such a new age of virtual art, when there are a plethora of problems going on in this world.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
