NFT sales plummet: market sinks and suggests it was a fad
Fashions are fleeting, even in investment. And it seems that we are facing one of them that has generated many expectations in recent months but that the market seems to have already tired of it.
We are talking about the famous NTF, Non-Fungible Token, a derivative of cryptocurrencies that, in this case, represents a unique cryptographic creation, which cannot be exchanged for any other. Some compare it to a work of art, and in fact most of them are illustrations created in digital format even by great artists, with their certificate of authenticity and all.
This led to a new phenomenon on the fringes of cryptocurrencies that was said to be the future. That is, we would all have an avatar in NFT format in the metaverse, where we would make our usual life. So much so that many fashion brands have created NFT clothing and so on.
But the market is making things difficult for NFTs and they may not be as successful as cryptocurrencies. There is even talk of a bubble, because a third of NFTs are now worthless.
According to a report by blockchain firm Nansen, one in three NFT collections has expired due to lack of investor interest in them. Not only that, another third are trading below what it costs token issuers to create them.
Thus, in the last 30 days, the price of NFTs has plummeted by almost 70% on OpenSea, the sector’s main marketplace. Hence, many are already comparing them to the ICOs (the Initial Coin Offerings) that began trading in 2018, which quickly lost their value when regulators warned that they were possibly unregistered.
Thus, experts are already talking about a speculative bubble through which money has flowed very quickly. A few days ago we already told it here: the only value provided by the NFTs was purely speculative and that even behind them there could be money laundering operations.
Other experts only point to a stabilization stage of this market after the initial boom, but it is true that less and less new money is coming in to support this sector, which is what ultimately makes creators give free rein to their imagination and bring new works to the market. In short, they lack funding.
In addition, there are fewer and fewer new buyers, the demand tends to come from those who were already in the market and there are more resales than new sales (as of March 15 there were 92,000 secondary sales and only 22,000 new ones).
Thus, we have gone from a value of this daily deal market in February in excess of $280 million to the current $50 million, while the average value of each NFT has gone from almost $7,000 to $2,000.
We will therefore have to keep a close eye on the development of this very new market, which changes in a matter of days. For the time being, it is not generating as much enthusiasm as cryptocurrencies, which are already attracting the interest of all and sundry. We will have to see if it manages to rebound and follow this path or if it remains just another of the many bubbles that arise in the investment sector.