No, it’s still not the end of NFTs

This is not the first time that the deaths of NFTs have been predicted. Even so, owning one is still beyond the reach of the average person.

That ” NFTs have stalled “, according to the Wall Street Journal. For Le Monde is the market for crypto art is running out of steam “.” End of the digital Eldorado » at Culture Geek, ” collapse “At Journal du Geek, or even” plummeting sales at La Fnac: on the web, many are the ones giving NFTs for the dead. Is the NFT market really collapsing? Actually not really.

NFTs have become a hot topic in 2021. These non-fungable tokens, or non-exchangeable tokens, are supported by blockchain technology and this is what enables them to act as certificates of authenticity. i ” mintant », That is, by recording a computer file on blockchain, it is possible to secure its origin, owner and rarity.

It is precisely for these reasons that NFTs gave rise to an art market that broke records in early 2021, with sales of several million dollars. Since then, sales of NFTs have dropped and many are calling them dead. Still, non-negotiable tokens are set to stay.

Extremely popular cryptopunk NFTs // Source: Larvalabs
Extremely popular cryptopunk NFTs // Source: Larvalabs

What happens ?

However, it is true that the negative signals accumulate. On April 7, 2022, the owner of the very first tweets NFT put it up for sale. Bought for more than $ 2 million the previous year, NFT today cannot find owners, and the price has dropped staggeringly: the highest bid on May 9, 2022 is only $ 24,600.

The Wall Street Journal also explains in its article that NFT sales have dropped significantly: Only 19,000 NFTs are sold per day, compared to 225,000 in November 2021. As for the number of wallets assets (ie people actively seeking to sell or buy NFTs), it is also down: they were no longer 14,000 last week compared to 119,000 in November, a drop of 88% in a few months.

Further

The Pope with an NFT from the Bored Ape Yacht Club, why not // Source: Numerama

The specialized site Non Fungible, which studies the main trends in the NFT market and which published a study that brings together the key figures for the first quarter of 2022, also noted some declines. Between the last three months of 2021 and the same period in 2022, the number of sales fell by almost half and the number of buyers fell by 30.91%. In addition to the number of sales, the total value of transactions has decreased: in total, sales decreased between the 4th quarter of 2021 and the 1st quarter of 2022 by 4.60%, from more than 8.2 billion to 7.8 billion.

Between the number of coins sold and their falling price, there are plenty of indicators to suggest that the NFT industry is not doing well. However, this is still far from the case.

NFT Bored Ape Yacht Clun continued to break records // Source: PiggyBank / Unsplash
NFT Bored Ape Yacht Clun continued to break records // Source: PiggyBank / Unsplash

“Second-hand NFTs” are still popular

First of all, it’s not all bad news for the industry: the average price of NFTs has risen by 80%, showing that the vast majority of tokens continue to rise in value. The average time spent owning an NFT before it is resold is also rising, showing that the market, although still speculative, is less choppy and volatile than last year.

These important indicators have not been taken into account by some observers, distorting the overall picture of the sector. Therefore, it is also important to note that the sale of what can be called ” used is on the rise and accounts for a larger share of transactions than ever before. This ” used market now accounts for 90% of traded value and approximately 70% of sales volume, according to Non Fungible.

Further

At Paris NFT Day, the meeting place for NFT collectors // Source: Aurore Gayte for Numerama

Finally, as Non Fungible points out in its report, it is very important to indicate that ” 2022 trends confirm that the price of NFTs is increasingly linked to the price of cryptocurrencies Although the value of bitcoin is still volatile, such a trend confirms that NFTs are increasingly seen as safe havens for cryptocurrency owners.

In a dedicated Discord, members of the site team explained that ” Although the number of active portfolios is declining, the number of buyers is still greater than the number of sellers “, which according to them is” a sign that there is still interest in NFTs “. Moreover, ” with nearly $ 8 billion in sales in the first quarter. of 2022, we can not really say that the market has collapsed “, They point out. ” We observe a stabilization of the NFT market in line with what we noted at the end of 2021. “

An excerpt from the study of NFTs conducted by Non Fungible // Source: Non Fungible
An excerpt from the study of NFTs conducted by Non Fungible // Source: Non Fungible

A market in “stabilization”

It should not be forgotten that the NFT sector last year grew extremely fast and attracted a large number of visitors and an equally large number of new projects. ” The NFT market ‘digests’ all the NFTs released in the last year ”, Explains the report from Non Fungible. The market, which had reached saturation and had chained records, has just begun to regulate and stabilize.

Therefore, if there is a decline in NFT sales, the time has not yet come to panic: it is not yet the end of NFTs, far from it. Last year, some observers already predicted the death of these tokens, as the beginnings of the second-hand market for NFTs were barely visible – and today they are still there.

However, it is not because the market is stabilizing that price records have been reached. The popularity of NFTs for collectibles is still there and it is still impressive. The Bored Ape Yacht Club collection is the perfect example: monkeys are the most coveted tokens at the moment, and they are collecting impressive sums. Their popularity is so great that when the Bored Ape metaverse project was launched, field NFTs sold out so quickly that transactions clogged the Ethereum blockchain for a while – proof that NFTs still have a lot to offer on. good days ahead of them.

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