97%. This is the volume lost from NFT sales since the January peak. In full free fall, the NFT market is largely following the flight of capital from the cryptocurrency market. And it seems to suffer even more.
Five consecutive months of decline for the NFT market!
As the hype around NFTs began in the summer of 2021, the market continued to structure itself to peak in January 2022. But as the cryptocurrency market was already beginning its fall since November, the NFT market seemed to be holding on. This cryptocurrency market crash will plunge cryptocurrency market capital from $ 3.000 trillion to less than $ 1.000 trillion valuation in just 6 months. In hindsight, the NFT market has suffered even more from this crisis.
The NFT market, which was popularized in August 2021, then experienced a few months of stagnation in terms of volumes traded. Before the explosion of the new year. In January 2022, the trading volume on the market exceeds $ 17 billion. Month after month, in a painful environment for the cryptocurrency market, this volume will decrease. While some might have thought there would be a recovery in April, this was not the case.
For the month of September 2022, the monthly trading volume is only $ 466 million. The volume that the market used to produce in a day is now not produced even in a month. The market has been silent for several weeks and trading volumes are close to what we used to see before August 2022. Already last May the Footprint Analytics platform raised the alarm:
In mid-May, the cryptocurrency market faced considerable challenges and the NFT market cooled down. NFT trading volume fell from $ 19,02 billion in the first quarter to $ 11,26 billion in the second.
What is the cause of this decline?
For many, this market decline can largely be explained by the bear market we are experiencing in the cryptocurrency market. A bear market which is in turn the consequence of the more hostile monetary policies pursued by central banks, in response to galloping inflation. Both in the United States and in Europe. In this regard, it is difficult not to link the cryptocurrency market and the NFT, as the vast majority of trading in these non-fungible tokens takes place via digital assets.
On the other hand, the loss of financial interest in buying NFT has also plagued the market. In fact, a study published last June revealed that 64,3% of respondents were buying NFTs to make money. This figure is clearly superior to other factors, such as the usefulness or the artistic aspect of the collections. For many, the recovery of the NFT sector may not coincide with the recovery of the cryptocurrency market.
