Non-expendable tokens have been swept away by the fall of the cryptocurrency, as sales hit a 12-month low in June.
NFTs give ownership of a unique digital element, often a piece of virtual art, to someone, even if that element can be easily copied. The property is recorded in a digital, decentralized ledger known as a blockchain.
NFT sales rose to just over $ 1 billion (£ 830 million) in June, according to cryptographic research firm Chainalysis, its worst performance since the same month last year, when sales were $ 648 million. Sales peaked at $ 12.6 billion in January.
“This drop is definitely related to the broader slowdown in the crypto markets,” said Ethan McMahon, an economist at Chainalysis.
“Moments like this inevitably lead to consolidation within the affected markets, and for NFTs we will probably see a setback in terms of the collections and types of NFTs that are gaining prominence.”
The cryptocurrency market, which was valued at about $ 3 trillion last November, is now worth less than $ 1 million.
NFTs are based on a blockchain (the decentralized book that bitcoin first used to track cryptocurrency ownership) to record who owns them and allow them to be traded. Most are based on the Ethereum blockchain, which is maintained by a carbon-intensive system called work proof.
NFT chart
At its peak, the NFT market was attracting back sums that include $ 2.9 million for a witness to Twitter co-founder Jack Dorsey’s first tweet. A digital collage by visual artist Beeple sold for $ 69 million; the main witness of the video game “play to win” Axie Infinity reached a total value of $ 9.75 billion; and Coca-Cola raised more than $ 575,000 from the sale of digital items such as a custom jacket to wear on the metavers.
According to Chainalysis data, NFT sales peaked in January. In April, an attempt to sell the Dorsey NFT was abandoned when bids reached $ 14,000.
However, demand for so-called blue-chip NFT collections has remained, according to DappRadar, a company that tracks NFT and blockchain-based video games.
The price of the cheapest NFT at the Bored Ape Yacht Club has only dropped 1%, to $ 90,000, over the past month, according to DappRadar head of research Pedro Herrera. “Blue chip collections perform much better than the vast majority of NFTs,” he said.
NFT sales reached $ 40 billion last year and the total for 2022 has already surpassed that, with more than $ 42 billion, according to Chainalysis. January and February sales accounted for more than half of the 2022 total so far.
The cryptocurrency market has come under pressure amid the volatility of broader stock markets, amid fears of rising inflation and higher interest rates, which have lowered the appetite for more assets. risky, such as technology stocks and digital assets.
Faith in cryptographic assets has also been shaken by the collapse of Earth, a so-called stable currency, the value of which was supposed to be pegged to the U.S. dollar, and problems with financial institutions related to cryptography such as the Celsius network, a provider that has stopped. withdrawals.