NFT sales total $3.4 billion in Q3 2022, down 68% YoY
Sales of NFTs plunged significantly in the third quarter of 2022 as investors stayed away from risk assets amid a challenging macroeconomic environment. NFT sales were $3.4 billion in Q3, down from $8.4 billion in Q2. Compared to Q3 2021, NFT sales in Q3 2022 are down 68.2%.
Crypto winter and tough macroeconomic conditions send NFT sales down 60% in Q3
The non-fungible token (NFT) market crisis continued in the third quarter as sales plummeted to $3.4 billion from $8.4 billion in the previous quarter, according to blockchain tracker DappRadar. The nearly 60% decline comes as investors continued to shun risk assets, which have been exposed in recent months.
Year-over-year, NFT sales are down nearly 70% from $10.7 billion in Q3 2021. Sales peaked at $12.6 billion in January, marking a 73% decline in just 10 months.
The latest quarterly report represents a sharp turnaround from 2021 when strong crypto performance encouraged investors to try to cash in on booming NFT prices. The NFT market had an inflow of $44.2 billion in 2021.
The steep drop comes as investors rotate away from crypto and other riskier investments amid record inflation and aggressive rate hikes by global central banks. The world’s largest cryptocurrency, Bitcoin, continues to trade below the $20,000 mark, down over 50% in the past six months.
Earlier this year, investors lost more than $800,000 in NFT investments after an NFT marketplace SudoRare disappeared with its users’ funds. The project deleted all social media accounts after the so-called “rug-pull”.
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OpenSea sales fell for the fifth consecutive month in September
The NFT market crisis sent sales on the largest NFT marketplace, OpenSea, down for a fifth consecutive month in September. OpenSea CEO Devin Finzer believes the current NFT environment represents an “intersection of both the macroeconomic downturn and the crypto winter.”
“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.”
– Devin Finzer, CEO of OpenSea
However, Finzer was more optimistic about OpenSea’s long-term outlook, saying the company is in a “good place financially.” Finzer believes the market will pick up again in the future and sees the ongoing decline as a “build-up phase”.
Earlier DappRadar report showed that OpenSea processed only $9.34 million in NFT transactions on August 28, compared to the May 1 peak of $2.7 billion. The number of OpenSea users also fell significantly last month to about 22,000, from almost 60,000 in January 2022.
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About the author
Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
