Is the NFT market in the basement?

Things looked very different a year ago: The trading volume on the NFT market is heading for a new 12-month low of USD 750 million. A trend that has been apparent for several months. Trading volume has now fallen by 95 percent since hitting a record high of $17 billion in January. After the highs of the NFT boom, the party mood finally seems to have died down.

Bored Ape Yacht Club in dive

The fact that the market mood is cooling is particularly evident in the NFT blue chip collections: Bored Ape Yacht Club, CryptoPunks, Meebits. The high-priced NFT series have recently lost a lot of their attractiveness. At 66 ether, the floor price for a bored ape hit a yearly low in August. It doesn’t look any better with the other flagship projects.

The tendency of the blue chip index has corrected downwards over the last few weeks and months. Also clearly visible here: Since April, the market capitalization of the draft horses on the NFT market has been declining with a few outliers. The sentiment barometer determined by NFTGo using volatility, social media, trading volume and Google Trends is on “cold”.

searches are falling

Google Trends also reveals that interest in NFTs used to be greater. Search queries peaked at the end of January this year, and since then things have been going downhill. The search queries are currently back at the level of the previous year.

Easy game for NFT scammers?

While trading volume continues to fall, the number of stolen NFTs has recently skyrocketed. The blockchain analysis company Elliptic according to $100 million worth of NFTs were stolen between July 2021 and July 2021. In July alone, scammers grabbed 4,600 NFTs. Particularly popular: the Bored Ape Yacht Club. Since July of last year, $43 million worth of BAYC NFTs have been stolen.

The end of the NFT hype?

Declining trading volume, falling prices, falling searches: the snapshot looks bleak. The NFT market seems to be falling victim to its own success at the moment: Having risen too high in too short a time – this is now taking its revenge.

NFTs also correlate strongly with the prices in the crypto market, which is still hanging on the skirts of the stock markets. The downward spiral on the markets accelerated by rising inflation, the energy crisis and the Ukraine war is also leaving its mark on NFTs.

Nevertheless: NFTs should by no means be buried. The fall in price of the luxury NFTs Bored Ape Yacht Club and CryptoPunks is above all evidence of a declining risk appetite. Speculators withdraw and with them the expenses.

However, this does not change the enormous growth potential of NFTs. Web3, metaverse, blockchain gaming: the major use cases are still in the development stage. NFTs play a key role here, and you have to give the still young technology time.