NFT trades down 99 percent on the most popular marketplace
The skyrocketing value of cryptocurrency seemed unstoppable in early 2022, fueled in no small part by the massive interest in NFTs. These “non-fungible tokens” sparked mainstream interest, prompting many people to buy crypto for the first time. Then came the crash. According to data from crypto tracker DappRadar, trading volumes on the most popular NFT marketplace have dropped by a staggering 99 percent in the intervening months.
Bitcoin is seen as a bellwether for cryptocurrency as a whole, and the original digital cash has fallen in value by more than half since the start of 2022. A single Bitcoin was valued at more than $60,000 at the end of 2021, and now it is struggling to remain above $20,000. Ethereum, which is often used to buy and sell NFTs, has seen a similarly steep drop from nearly $5,000 per ETH to around $1,500 in late August.
The OpenSea marketplace was confident on the crypto wave while celebrities were all over the TV and internet showing off their boring monkeys. On May 1, OpenSea recorded $2.7 billion in NFT transactions, but this past Sunday they only managed $9.34 million, a tiny fraction of the trading volume from just a few months ago.
Even the Bored Ape Yacht Club, which has been the most popular NFT project of the past year, has seen its fortunes slide. The floor portion of the NFT collection has fallen 53 percent since the spring, landing at 72.4 ether (roughly $110,000).
ETH price throughout 2022.
NFTs gained traction because of the artificial scarcity ingrained in the tokens. While most NFTs are just low-resolution JPEGs, the ability to “own” and trade them as an asset attracted massive attention. People didn’t want to miss out and spent millions of dollars in crypto to get their hands on the most coveted JPEGs – the fact that you can simply right-click and copy most NFTs didn’t even seem to bother people.
OpenSea tells Fortune it disputes DappRadar’s methodology, which includes the dollar value of crypto. When you ignore the value of cryptocurrency and look only at ETH volume as OpenSea prefers, trading has fallen by a less alarming 62 percent. Furthermore, OpeSea says the 99 percent drop compares the site’s all-time high trading volume to one of its lowest last Sunday. Although I will point out, that’s generally how comparisons work, and Sunday isn’t much of an outlier. Even in the middle of the week, trading volume is below $20 million. Still, OpenSea says it expects volatility in NFTs and cryptocurrency.
Current NFTs don’t do much, but many have pegged these digital assets as an important part of the metaverse pushed by Mark Zuckerberg and others. Real progress in the development of virtual spaces could pump up interest (and thus prices) again, but it could take years, and the NFT counter-ignition could be dead long ago.
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