- With interest waning, 95% of the NFT projects have no market value.
- Ethernity has brought a layer-2 upgrade to enhance NFT gaming.
Since the NFT market first emerged in 2021 and made millions of people overnight with “on-chain JPEGs,” things have changed dramatically. Like the current memecoin mania, this speculative frenzy caused a billion-dollar market boom.
But the heyday was brief, and following a turbulent two-year bear market, a depressing realisation has dawned: people are becoming less interested in NFTs.
NFT Market: From Frenzy to Decline
The NFT market of today and the hysterical anticipation of 2021 are very different. Low sales and a diminishing interest rate are forcing investors and traders out of the once-booming ecosystem.
Though NFTs have a global market capitalization of more than $190 billion, the sector still has a lot of obstacles. Invezz data shows that out of over 73,000 NFT collections with a combined trading volume of $17 billion, a startling 95% of these projects—over 69,700 collections—have no market value as of press.
Trading Volumes are Falling
Since its high point in 2021, the trading volume of the NFT market has fallen by 97%. Once well known for producing millions of sales per sale, collections like CryptoPunk and Bored Ape Yacht Club today barely manage to produce hundreds.
Of the NFT sales, 53.6% were valued at less than $200 and 75% at less than $100, according to the study. Additionally, daily sales fell precipitously in 2024, from an average of 87,000 in 2021 to under 2,000.
The market’s $11.6 million in revenue in Q1 2024, which is a far cry from the sector’s billion-dollar hauls per quarter in 2021, offers a sobering perspective.
The crypto market has been through a difficult downturn, made worse by global unrest and incidents like the FTX debacle. Despite a lot of institutional attention, global macroeconomic and geopolitical risks are threatening investor confidence.
Innovations in Technology and Their Prospects
For the NFT market, there is ray of hope. ETHNews just reported on a big step Ethernity took to improve NFT gaming: a layer-2 update. Though dormant, the NFT market is ready to come back whenever market conditions improve.
Given their turbulent performance throughout the last two years, NFTs are an unattractive investment option because they are by nature speculative and dangerous. But once individual investors get back into the game and move money from low-risk to high-risk assets, the market might recover its lost bravery.