Non-fungible tokens (NFTs) shocked the world a few years ago when they gained popularity. Stories are told of people spending millions buying NFTs and metaverse land in 2021. One of the most popular is when the CEO of Tokens.com spent $2.4 million in a virtual land or when Republuc Realm bought a virtual Sandbox plot for $4.3 million.
Stories have also been told about many people buying NFTs and losing almost all their money. The question now is whether NFTs are dead and what their future holds. Moreover, NFTs are some of the most important parts of the blockchain industry.
Are NFTs dead?
Most analysts believe that NFTs are now officially dead, as rock bottom prices of popular products like Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) have fallen to record lows. Other NFTs that used to do modestly well, such as Othedeed and Sorare, have come under intense pressure recently.
And they are not the only ones. OpenSea, the company that dominated the sector, is in trouble as demand for these tokens has declined. In November last year, the company laid off more than 50% of its workforce, a few months after losing 20%. There are concerns about whether the company will survive.
It’s not alone. SuperRare, another NFT marketplace, lost more than 30% of its employees a few months ago as demand for these assets declined. GameStop, the giant US retailer also closed its collectibles marketplace due to weak sales.
Other NFT statistics are not encouraging at all. For example, data from Cryptoslam shows that total sales volume for NFTs in the last 24 hours was just $38 million, down 19% from the previous session. Volume fell 38% to $1.12 billion over the past 30 days, indicating the trend is not continuing well.
In total, total NFT sales have exceeded $60 billion in recent years. As shown below, the trend was not encouraging as the volume, number of sellers and buyers were in a downward trend.
NFT sales volumes
Wash trading is one of the biggest challenges the NFT industry has faced in recent years. For example, while the total volume of NFTs is over $60 billion, the wash trade accounted for $33.5 billion. In the last 30 days, the volume of NFT sales was $1.1 billion, of which $348 million were sales.
To begin with, these wash sales are situations in which people trade among themselves with the aim of driving up prices.
NFTs are still alive, but the future looks bleak
A look at the ongoing NFT flows shows that the trend is worrying. It’s a sign that the sector is facing a slow death as NFT values fall. If this trend continues, I believe the industry will no longer exist in the coming years.
It is alive as we can see from the daily volume of NFT sales. Data shows that Ethereum NFTs sold more than $26 million in the last 24 hours. They were followed by Bitcoin Ordinals, which exceeded $7.52 million, and Polygon, which earned over $1.1 million.
Most other blockchains such as Arbitrum, Solana, Avalanche and Ronin achieved total revenues of less than $300,000. At their peak, these blockchains processed NFTs worth millions of dollars per day.
Some analysts believe that the NFT industry was doomed from the start because most collections had no value at all. Unlike cryptocurrencies, these NFTs did not pay wagering rewards and were intended for speculation purposes only.
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