NFT marketplace trading is down as crypto winter rages on

The crypto winter is still raging in its wake Terra failure and many large ones crypto loan companies goes bankrupt.

It turns out that cryptocurrency’s blockchain brethren, NFTs, aren’t doing so hot either.

The highly volatile speculative investments that tokenize digital assets on the blockchain are feeling the crypto winter effects. Trading volume on the largest NFT marketplace, OpenSea, has dropped a whopping 99 percent in the four months between May and August 2022, according to data from the decentralized app store DappRadar and reported by Fortune.

The declining popularity of the NFT market is even more stark when you look at the financial numbers. OpenSea saw about $2.7 billion in transactions on May 1. On August 28, the platform received just over $9.3 million in transactions.

However, celebrities and brands continue to promote NFT projects in hopes of getting their digital pockets.

In fact, celebrities selling NFTs without proper disclosure have become so widespread that consumer watchdog Truth in Advertising sent warning letter to a number of celebrities, such as Justin Bieber and Reese Witherspoon, regarding their deception.

At the MTV VMAs last Sunday, the same August 28, Eminem and Snoop Dogg took the stage, and while they were performing, transformed into 3D models of their respective Bored Ape Yacht Club NFTs. The Bored Ape aspect of the show had many viewers asking…Why?!

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But if you’re familiar with any of the artists, you’ll know about theirs foray into the NFT area in recent years. Snoop Dogg in particular has gone all in on non-fungible tokens, having created 44 million dollars just earlier this year from selling NFTs of his latest album.

Earlier this year, however, was a much different time for NFTs. Today, the value of Bored Ape Yacht Club NFTs, easily the most popular of the NFT projects, has also plummeted. At its peak on April 30, the floor price for a Bored Ape NFT was 154 Ether, the cryptocurrency traded on the Ethereum network, but as of September 2, the floor price was around 75 Ether, representing more than a 50 percent drop in value. It should also be noted that the value of ether has also fallen, from about $2,800 in April to $1,500 in September. So Bored Apes has taken it pretty hard.

And the downturn is not only found at OpenSea either. Other NFT marketplaces feel it too. Coinbase, the largest crypto exchange in the US, launched its own NFT marketplace in May. It has failed to gain any real traction, often just recording round a low five figure in sales per day. Video game retailer Gamestop too launched its own NFT marketplace in July and has seen approximately same activity … or lack thereof.

However, some brands are reading the room. Most notably, the studio behind the hugely popular video game Minecraft announced it would not get involved in NFTs.

But still, the brand crush on NFTs continues. Starbucks is looking for launch a loyalty program that uses NFTs are luxury brands such as Gucci and Tiffany sheep into the non-fungible token action, and even M&M’s are let go a Bored Apes version of the candy.

Cryptocurrency has faced downturns before and has made a comeback. But the much newer NFT phenomenon faces an even bigger challenge: Brands believe in it, but consumers don’t. That’s a big problem to overcome.