Is the NFT bubble slowly and gradually bursting? Was the whole NFT boom, what many experts called it – just a bubble? While 2021 saw a big bull run of NFTs, NFT sales gradually decreased over the last few months.
According to a recent report by the Wall Street Journal, the NFT sales per day came down to an average of 19000 from a high of approximately 200000 in September 2021, which is a 92% decline for the sales in this week. The number of NFT wallets that were active from them has also reduced from approximately 120000 to 14000. The numbers are not only alarming but are also telling a story of the stark decline in the use of NFTs.
According to the WSJ report, many investors report that their NFT investments are worth a lot less now than they were in the NFT boom phase.
When NFTs were booming in late 2020 and throughout 2021, many big names from various industries entered the NFT market. Snoop Dogg, Nike, McDonald’s, Adidas, Tesla, and Lamborghini are some of the big names that entered the NFT market. The list is quite long by now. But whether that is a true signal of a bright future for NFTs is yet to be seen.
Google Trends Data Shows An Almost 80 Percent Decline in NFT Searches Since January 2022.
According to the latest data displayed on Google Trends, the search volume and frequency for the term “NFTs” have reduced by almost 80 percent since January 2022.
Jack Dosrey’s first tweet, which was sold as an NFT for $2.9 million, when later was put up for auction by the CEO of a Malaysian-based blockchain firm, received the highest bid of only $14000. Whether this extremely low bid was a sign of a bursting NFT bubble or just normal and healthy cyclical market changes is yet to be seen.
To add to the decline in NFT sales is the popular Snoop Dog NFT which was sold for $32000 and was put up for auction for a few million dollars. However, the highest bid it has received yet is only for $210. But these are just a few instances where NFTs are being bid at lower prices than what they were initially sold for. There are many more instances that also point towards a gradually expanding NFT market.
According to a data report published by IntoTheBlock, a blockchain-based intelligence firm, the number of NFT projects on the Ethereum network has increased by 100 percent in 2022.
The number of projects on the Ethereum blockchain increased from 15000 to 80000 last year and into 2022. To add to that, the Moonbirds NFT project saw a trading volume of over $500 million after release in 2022.
Ethereum is not the only blockchain that is supporting the NFT boom. While it is the first blockchain on which NFTs were created, Solana is not far behind.
Experts predict that the Solana blockchain will see new NFT projects that will even overtake popular blue-chip projects like BAYC. The Solana network saw an NFT trading volume of over $200 million in 2022, and even in the current market dip, it’s only rising.
According to Akon and many other big names in the NFT space, NFTs are here to stay. The big dip we are witnessing in the NFT market is likely a healthy correction rather than a bursting bubble. According to NFT enthusiasts, the NFT market is at the end of a curve, an end of a cycle before the next curve, the next cycle begins.
NFTs are here to stay and I encourage artists, large and small, to explore and try them out. The market is growing quickly and there’s no better time to get started.
— AKON (@Akon) March 18, 2021
With the NFT boom in 2021, there were and are hundreds of new NFT projects across multiple blockchains. The rise of many players and projects is generally what happens when a new market booms. The same happened during the dot.com bubble burst in the 90s. The bubble had to eventually burst for something more legit and useful to be born.
Similarly, many of these new NFT projects were launched without any real utility and use case. They failed to provide the NFT holders and community with any real value. And worse, some of them were and are also rug pulls and scams.
Hopefully, with an end of a massive NFT cycle, the new one will bring projects with more utility and use cases.
The NFT future is bright also due to huge real estate companies planning to enter the market now. With NFT land, NFT staking, passive income, and helping artists reach millions of people, the scope for NFTs is humongous. It will be interesting to see what emerges after this much-needed NFT market pullback!