NFT sales plunge in the 3rd quarter, down by 60% from the 2nd quarter

LONDON, Oct 3 (Reuters) – Sales of non-fungible tokens fell sharply in the third quarter, according to blockchain tracker DappRadar, as crypto investors look for a “crypto winter” and demand for the highly speculative digital assets shows little sign of rebounding.

Non-fungible tokens (NFTs) are a type of blockchain-based asset that represents a digital file such as an image, a video, or an element in an online game. They exploded in popularity in 2021, as crypto-rich speculators rushed to profit from rising prices, but sales volumes have fallen in recent months.

The third quarter of 2022 saw $3.4 billion in NFT sales, down from $8.4 billion the previous quarter and $12.5 billion at the market’s peak in the first quarter of the year, DappRadar said.

While the nascent NFT market benefited from cryptocurrency price gains and high risk appetite among investors in 2021, these conditions have reversed sharply in 2022, as central bank rate hikes prompt investors to shed risky assets. Bitcoin is trading around $19,000, down from a peak of $69,000 in November.

THE MARKETS FAKE

Sales on the largest NFT marketplace, OpenSea, fell for the fifth consecutive month in September.

“I think the unique thing about this environment is that it’s the intersection of both the macroeconomic downturn and the crypto winter,” said Devin Finzer, CEO of OpenSea, which is backed by investors including a16z.

“The previous crypto winters were a little more isolated to just crypto prices, so for that reason I think it’s wise to be conservative about how long this could last.”

But he said the company is in a “good place financially” and he is excited about the potential of NFTs in the longer term, describing the downturn as a “build-up phase”.

Weekly NFT buying numbers have more than halved from their peak in late January, according to market tracker NonFungible.com.

While the traditional art market was quick to embrace the craze, sales figures have dried up, with NFT sales at Christie’s, Sotheby’s, Phillips and Bonhams totaling £8.4 million ($9.41 million) so far this year, down from 127 million pounds at the same time last year, according to data from Art Market Research.

($1 = 0.8929 pounds)

Reporting by Elizabeth Howcroft, editing by Ed Osmond

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