The sharp decline in NFT sales and wallet activity has some people proclaiming the death of the nonfungible token space.
The nonfungible token wing of the crypto space has declined even more rapidly than the broader market in the past month or so after sales of NFTs sank 90% since they peaked in early May.
Data provided by Protos paints a picture of an NFT market in the midst of implosion as sales across all categories continue to decline rapidly.
After $102 million worth of NFTs were sold in a single day on May 3, just $19 million worth were sold in the past week. Over $170 million worth of NFTs were sold in the seven-day window on either side of the market top, equating to a near 90% decline since then.
The number of NFT wallets showing any signs of activity on a daily basis is also down 70% since early May, after falling from 12,000 to 3,900. NFT sales and wallet movements were down across the entire range of token categories, spanning gaming, decentralized finance, collectibles, art, utility, metaverses and sports.
Crypto collectibles were the most purchased NFTs during the market peak — and remain so today — having declined by just 66% in the past month. The second-most popular NFT category relates to sports tokens, which showed the most resilience during the market drop, with active wallets having declined just 55% since early May.
Current data on NonFungible.com shows collectibles (CryptoPunks) and sports (Sorare) tokens to have processed the most volume in the past seven days, making up close to 40% of the total NFT volume.
Protos’ analysts were quick to conclude that the NFT bubble has already burst. They wrote, “All things considered, the data suggests the NFT bubble lasted just four months — and it popped about this time in May.”
NFTs provoked equal parts of hype and confusion when they emerged as the crypto space’s latest craze earlier this year, following in the footsteps of the tokenization movement (see Dentacoin), the ICO phase, and DeFi and yield farming. Depending on one’s capacity for optimism, NFTs are (or were) either the hottest new technological invention to emerge from the blockchain realm or an absolute scourge on the crypto space, which provided little value and lots of noise.
Regardless of where one stands on the matter, the noise would seem to be dying down.
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Author: Greg Thomson