NFT sales see a 25% decline from June to July amid the crypto downturn

Sales of non-fungible tokens (NFT) in July on secondary markets fell 25% from June to $650 million, the second month in a row below $1 billion, according to data from NFT aggregation site CryptoSlam, reflecting a broader crypto decline.

Sales peaked in January at $4.7 billion, with more than 1 million unique buyers in the market.

“The present [crypto] the market right now is in a bear market,” said Anndy Lian, blockchain author and entrepreneur and founding member of NFT creator studio Influxo. Discard in an interview. “So [NFT] sales actually reflect very much on how the market reacts.”

Yehudah Petscher, NFT relationship strategist for CryptoSlam, said he believes the market has yet to bottom out.

“I don’t know if we’ll find the bottom this year,” he said in one Discard interview. “I think this bear market we’re in could extend for several years.”

However, he found some optimism in the number of unique buyers in the market, noting that buyers fell just 7% month-on-month in July to 532,000, which is still higher than the same month last year.

This shows, says Petscher, that while total sales in US dollars are down, the number of transactions gives a slightly more optimistic view.

“NFTs are in a difficult place right now, but I still believe in a very healthy place in terms of growth [or] as far as transactions [are concerned]”, Petscher said.

Merge and more

The so-called “Merge” for Ethereum could also give the NFT market a chance, as the leading blockchain for NFTs is scheduled to move to a proof-of-stake (PoS) network in the coming months.

The move to PoS will reportedly reduce the energy used in the Ethereum network by up to 99%, blunting environmental criticism of how the network works.

“I think [the Merge] will create a new spur of hype among the Ethereum fanbase,” Lian said, but warned that transaction fees — another common criticism of the Ethereum network — are likely to remain high.

The NFT and crypto markets now appear to be highly correlated, despite expectations during the NFT boom in late 2021 and early 2022 that they would be inversely correlated. The view then was that investors would be less willing to buy NFTs when the crypto they were denominated in increased in US dollars.

“But they [now] appears to be in lockstep, Petscher said. “When crypto is down, NFTs seem to be down. Now I don’t know exactly why that is and why it doesn’t mirror what we thought, but they are attached at the hip.”

Instead of falling crypto values ​​driving the price of NFTs up to compensate, the general negativity in the market is driving prices lower to attract whatever buyers are there, Petscher said.

“There’s not a lot of liquidity and people are worried that there aren’t going to be buyers when they’re looking to sell, so it’s a race to the bottom,” Petscher said. “We can see that with prices across the board.”

The monkeys rule (still).

Projects from Yuga Labs continued to dominate the top of the July bestseller list, with Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC) and CryptoPunks all in the top five.

Otherdeed – the plots of the upcoming BAYC metaverse project “Otherside” – ranked fourth for the month with transactions worth over USD 30 million.

This made the project the seventh to reach US$1 billion in total sales, despite only launching in May.

With over $30 million in secondary sales in July, soccer-based collection Sorare came in third on CryptoSlam’s list. Sorare allows people to buy and sell players as part of a global fantasy football competition as another way to interact with the world’s game.

Petscher told Discard that he expects sports to be a real growth area, as these tokens typically bring with them increased utility.

An example is the WAGMI United token issued by British football club Crawley Town FC, which gives fans the opportunity to vote and participate in team decisions through ownership of the digital token.

Another area of ​​growth is art, says Petscher, who sees attention starting to move away from NFTs as mere profile pictures to more fully-fledged works of art as more creators move into the space.

“That’s just the tip of the iceberg,” Petscher said. “Art [NFTs] has just started, it’s here in a big way, and it will only continue to grow.”