The speculative NFT market is probably in its worst shape ever. Almost no traders are actively participating in the market. So, is NFT’s era of for-profit trading over? Do the Web3 community and companies need to change the way they view digital collections? Things have never looked worse for non-fungible tokens (NFTs). At least when you take into account the buying and selling amounts. Here are the highlights…
NFT market has dropped drastically compared to last year
According to data from Dune, only 190 unique ETH wallets have bought or sold an NFT in the past seven days. Almost a year ago, that number was around 181,000+ unique ETH wallets. Cumulatively traded NFT volumes have been essentially flat since the beginning of June 2022. This reflects the emptying of the market. With traders evaporating, “blue chip” NFT holders are now struggling to get out of their positions.
In general, those with the worst headaches are those with profile pictures (PFPs) that do little or no use. These pictures hit the market after Paris Hilton went on Jimmy Fallon and compared the Bored Apes. Since then everything has gone downhill. Still, executives see hope in a shift away from speculative, productive PFPs towards tokens that do what other technologies can’t. cryptocoin.com As we reported, this year Ticketmaster engaged NFTs for their events. NFT ticketing alternatives still raise millions of funds.
VC investments in crypto plummet
The application of NFTs to games or digital identity has long been seen as a growth area for the technology. However, a consensus is emerging that the heyday of large-scale, speculative NFT trading is over. It’s not just NFTs that appear to be on the decline in the long run. Money is shifting from Web3 to artificial intelligence (AI), according to a new report by Galaxy Digital. Because of this, VC investment in crypto also fell in the fifth quarter. Modeo Cheng, chief game designer at Curio Research, believes NFTs will find their niche in games once they become available. Cheng said:
Currently, the bulk of NFTs are used primarily for speculation. It is unlikely that many of them will survive. However, I envision a future where practical crypto applications that foster on-chain interactions can significantly increase their value.
Cryptocurrencies in a healthy era
Brian D. Evans, CEO and founder of BDE Ventures, a Web3 studio and consulting firm, is surprised that the crash occurred during a period of relative health for other cryptos. “While the likes of Bitcoin, Ethereum, Solana are rising, NFTs are moving in the opposite direction,” he observed. Unlike many other observers, Evans believes that PFP projects are in decline but not finished. Evans has made it clear that he doesn’t believe PFP NFTs are a thing of the past. Evans said:
What will likely happen is that as ‘fungible’ coins continue to rise, people will make a profit and then recycle this fresh capital along the risk curve. This will likely mean more money flowing into new and solid PFP projects in the future. But this won’t happen overnight.
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