Non-fungible tokens, or NFTs, were all the rage in 2021, rising to astronomical heights alongside skyrocketing cryptocurrency prices. However, cryptocurrency prices fell off a cliff in 2022, throwing cold water on the NFT market. Prices have fluctuated dramatically since then, and trading volume has been far below what we saw in 2021.
NFT transaction volume in 2022
Overall, NFT transaction volume in 2022 decreased dramatically. From January 2022 to September 2022, NFT trading volume collapsed by 97 percent, from $17 billion in value to just $466 million, according to data provided by Bitay.
As of June 2022, the total number of daily sales was around 19,000, with a value of just $13.8 million. From March to June 2022, the total NFT market value fell by 40 percent, while trading volume collapsed by 66 percent – right in line with falling cryptocurrency prices, especially on Ethereum.
May 1, 2022 remained the highest value trading day in NFT history, when 118,577 NFTs were sold for a total value of $780.4 million. However, as the crypto market has continued to languish in a “crypto winter”, NFT prices and transactions have not shown any serious signs of recovery.
Kameshwaran Elangovan, co-founder and chief operating officer at GuardianLink said they have also seen many brands enter the metaverse space, floating their own digital collectibles, thus paving the way for fully digital audience interactions in the Web 3.0 space.
“Recognizing the potential of Web 3.0, the relevance of decentralized customer interaction and the need to provide exclusive digital experience to customers in the metaverse, brands like Nike, Flipkart, Pepsi, Bulgarian and even Louis Vuitton started creating unique digital experiences for their customers facilitated by NFT, he says.
Top Dollar NFT Sales in 2022
Although the NFT market dried up to some extent in 2022, there were still many notable high dollar sales. In fact, given the way the crypto market completely imploded under it, the NFT market actually held up pretty well, at least in terms of high dollar sales.
Here are the top dollar NFT sales in 2022:
XCOPY’s all-time high in the City, January 2022: 1630 ETH ($6.2 million at time of sale)
CryptoPunk #5577, February 2022: 2501 ETH ($7.7 million at time of sale)
CryptoPunk #5588, February 2022: 8000 ETH ($23.7 million at time of sale)
Julian Assange and Pak’s Clock NFT, February 2022: 16,953 ETH ($52.7 million at time of sale)
CryptoPunk #5588 was the highest priced CryptoPunk NFT ever sold. That said, there were no peak sales of NFTs after February 2022, which is a clear indication that the NFT market started to slow down as the year progressed.
What awaits in 2023?
Amanjot Malhotra, Country Head – India, Bitay, says that while there is no doubt that the NFT market has taken a serious hit in 2022, some very bullish analysts and industry insiders still see 2023 as much kinder to the market.
This hope rests on the fact that NFTs are a crucial part of the digital economy, which looks set to expand, even if it will not become the “parallel universe” that is as important to today’s market as some predict.
The theory behind this bullish outlook is that NFTs will continue to be adopted by video games, artwork, music and digital collectibles. NFTs may actually have staying power if life becomes more virtual in the coming years, in the sense that consumers use virtual assets in the metaverse. A report from Verified Market Research also estimates that the market value of NFTs will jump to $231 billion by 2030.
However, prices will likely have to reverse course before hype returns to the sector. In November 2022, Google reported that searches for NFTs have fallen by 88 percent in less than a year, perhaps the best real-world indicator of how interest in the sector is waning.
“The question investors need to answer for themselves – in conjunction with a financial advisor – is whether the falling prices and trading volumes in 2022 are indicative of a washout bottom or just the beginning of the pain in the sector,” adds Malhotra. .
