The non-fungible token (NFT) market has faced a drop of 44% in the sales in the second quarter of 2024. Experts are attributing this dramatic fall to the recent flood of celebrity, political, and animal-themed memecoins.
According to data from CryptoSlam, NFT sales fell from $4.14 billion in Q1 to $2.32 billion in Q2, reflecting the broader market downturn.
Mind Share, Memecoins, and NFT
Henrik Andersson, chief investment officer at Apollo Crypto, pointed out this trend and “mind share.”
“Mind share” refers to the amount of consumer awareness or popularity that a particular product or idea commands, and memecoins have recently captured a significant portion of it.
Andersson pointed out that the surge in memecoins has likely diverted attention away from NFTs. Notably, despite the slowdown in NFT sales, memecoins continue to generate substantial trading volumes. CoinGecko reported a staggering $3.4 billion traded in just the past 24 hours.
This surge has been driven by the rise of PolitiFi memecoins linked to the U.S. presidential election. Notable mentions include the MAGA (TRUMP) and Pepe (PEPE) memecoins.
Another Factor: Ordinals
Andersson also highlighted the emerging trend of Bitcoin-based Ordinals, which could further erode the NFT market share.
“Longer term, we believe Bitcoin Ordinals will continue to take market share in the NFT space, particularly given the many Bitcoin Layer 2s coming to the market,” he noted.
However, it’s worth mentioning that both Ordinals and Runes have experienced a decline in network activity, as TheCoinRise reported. Runes transactions have recently fallen by 88% from their June’s peak.
A Glimmer of Hope
Nevertheless, there is a glimmer of hope. NFTs have rebounded before, notably in the last quarter of 2023 when sales surged to over $3 billion. This includes a remarkable $1.77 billion in December alone. Iconic NFT collections like CryptoPunks and Bored Ape Yacht Club maintain impressive market caps of $994.9 million and $345.9 million, respectively, dwarfing the largest Ordinals projects.
The historical data suggests that the NFT market could experience another resurgence in the latter half of 2024. Meanwhile, new innovative projects and overall bull market would potentially reignite the ongoing boring phase of the NFT market.
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