The NFT market is tanking. From a booming $946 million in January, the trading volumes have crashed hard. It’s a big dip for NFTs, with sales volume down 36.17% to around $443 million.
Transactions hit a total of 10.8 million, up slightly by 8.97%, but the overall vibe is gloomy. Wash trading, a practice where the buyer and seller collude to manipulate the market, has also taken a huge hit.
The wash volume plummeted by 78.33%, now sitting at $51 million. Even wash transactions have dropped by 66.85%. The market’s trade profit stands at a negative $17.8 million,.
January’s bright fizzles out
January kicked off with a bang. NFT trading volumes hit $946 million, the highest since mid-2022. Everyone, from big companies to collectors, seemed excited. But by February and March, the excitement was already fading.
While trading volumes stayed stable, cracks started showing, especially in the art segment. Transactions in this area took a nosedive, with the number of art-related NFT sales dropping to around 1.8 thousand by April.
Compare that to the peak of over 117 thousand in 2021, and you get a sense of how bad things have gotten. May brought more bad news. The overall market cap for NFTs shrank to a third of its value from March 2022.
People aren’t as interested in NFTs as they used to be, and it shows. June was brutal. NFT sales plummeted by 42.04% compared to May.
The whole cryptocurrency market was in a downturn, with Bitcoin’s price falling from a high of $73,000 in March to about $56,500.
By July, there was some hope for stabilization. Trading volumes were not back to early 2024 levels, but there was a slight uptick.
Some major companies like Amazon and Salesforce are still pushing forward with NFT-related services, which gives a glimmer of hope.
Amazon’s platform lets people buy NFTs without needing a crypto wallet. And Salesforce integrated NFT loyalty programs into its CRM platform.
Increased regulatory scrutiny and a general loss of enthusiasm for digital collectibles likely played a big role in the slump. The NFT market is under the microscope.
Governments worldwide are looking at regulations that could change how NFTs are bought, sold, and owned. This increased scrutiny has made investors nervous.
The uncertainty is a big reason why trading volumes are down. People are holding back, waiting to see what new rules might come into play.
