Nonfungible token sales reached a record high in January as the assets grew in favor of cryptocurrency investors, regular customers, and even celebrities. But as 2022 draws to a close, the situation is entirely different.
According to blockchain data tracker CryptoSlam, monthly global NFT sales fell 89% in November compared to a record high of more than $4.9 billion in January. Marketplaces that sell the once-hot digital assets, such as those established by GameStop Corp. and Coinbase Global Inc., are in danger as a result of the fall. The collapse of the hedge firm Three Arrows Capital, the insolvency of the cryptocurrency lender Celsius, and the spectacular collapse of the digital asset exchange FTX also reflect a wider crypto downturn.
Ian McMilan, chief growth officer of Mojito, a software firm that aids well-known businesses in developing NFT platforms, declared that confidence has been substantially shaken.
According to data given by DappRadar, sales have been shaky since GameStop introduced the platform five months ago, despite the NFT marketplace setting a record of more than $2.1 million in daily volume on July 12. The day before GameStop started selling NFTs based on the ImmutableX protocol on October 30, the blockchain analytics company that followed GameStop NFT’s blockchain transactions on the Loopring protocol recorded a little over $4,820 in transactions.
Since DappRadar stopped reporting GameStop NFT sales on November 9, it’s unclear how the platform is now doing. Because the data would be inaccurate without the ImmutableX volume, the firm and GameStop opted to suspend tracking, according to a DappRadar spokeswoman. However, the company intends to restore tracking “in the near future.”
On Nov. 11, the day FTX filed for bankruptcy, GameStop stopped its two-month pilot agreement with FTX US to sell the cryptocurrency exchange’s gift cards, according to a tweet that stated it “will be offering full refunds to impacted customers.
The NFT marketplace for FTX US, the crypto exchange’s American affiliate, directs visitors to the crypto exchange’s bankruptcy proceedings. When viewed on other NFT marketplaces such as Magic Eden, NFTs created or “minted” using the platform also link to the same bankruptcy web page or display an error message.
The Coinbase platform, which had a rocky start when it first started in May, is also being impacted by the decline in interest in NFTs. According to blockchain tracker Dune Analytics, trading activity has considerably decreased since the market’s all-time greatest day of sales in September. On Sept. 9, Coinbase NFT reported sales of over $533,500, but on Dec. 26, volume fell by 99% to just over $5,000.
Since its launch, the site has generated total sales of $7.2 million, according to Dune Analytics. According to DappRadar, that is less than the $8.2 million OpenSea, the top NFT market based on trade volume, reported in the most recent 24 hours. However, even OpenSea has seen its 30-day revenues stay constant at $186 million.
Max Branzburg, consumer product group lead at Coinbase, responded in a statement when asked about what the company was doing to increase sales of Coinbase NFT. He said that the company had modified its Drops program for NFT launches and added a way for NFT collectors to avoid paying high fees resulting from blockchain network congestion.
Over 92% of their Drops on Coinbase NFT sold-out in less than 24 hours in Q3 of this year, he claimed.
However, an NFT recovery may be more difficult to achieve given the industry’s recent controversies, according to Catherine Flick, a reader at De Montfort University in the UK who researches the moral implications of NFTs.
She wrote in an email, Now that we’ve experienced many crypto crashes, the sheer monetary worth of the NFT is no longer a selling factor – most people have lost money on them.
During the market slowdown, some of Mojito’s clients have pulled back from the assets, particularly if they are being used for novelty marketing campaigns, according to McMilan. Mojito has worked with companies like Sotheby’s and the Milwaukee Bucks professional baseball team to develop NFT offerings. In the long run, he claimed that other businesses are still interested in employing NFTs, particularly when combined with more conventional goods like physical goods.
People just want to wait it out and let the storm pass, he claimed.
