According to data from CryptoSlam, sales of non-fungible tokens (NFTs) on secondary markets dropped by 25% from June to July, to US$650 million. This is the second month in a row that sales were less than US$1 billion.
In January, sales reached a high point of $4.7 billion, with more than 1 million different buyers.
“The current [crypto] market right now is in a bear market,” blockchain author and entrepreneur Anndy Lian told Forkast in an interview. Lian is also a founding member of NFT developer studio Influxo. “So [NFT] sales actually reflect very much on how the market is reacting.”
Yehudah Petscher, a strategist for NFT relations at CryptoSlam, says that the market hasn’t hit bottom yet.
He told Forkast, “I don’t know if we’ll find the bottom this year,” “I believe this bear market we’re in could extend for multiple years.”
But he saw some reason to be hopeful in the fact that the number of unique buyers in the market dropped by only 7% from June to July, to 532,000, which is still more than the same month last year.
Petscher says that even though sales in US dollars as a whole are down, the number of transactions shows a slightly more hopeful picture.
Petscher said,“NFTs are in rough place right now, but I still think in a very healthy place as far as growth [or] as far as transactions [are concerned],”
Mix together and more
The so-called “Merge” for Ethereum could also help the NFT market, since the top blockchain for NFTs will soon switch to a proof-of-stake (PoS) network.
The switch to PoS is expected to cut the amount of energy used by the Ethereum network by up to 99%, making it less harmful to the environment.
Lian said, “I think [the Merge] will create another spur of hype among the Ethereum fan base,” but he warned that transaction costs, which are another popular issue with the Ethereum network, would almost certainly stay high.
Even though it was thought that they would be linked in a bad way during the NFT boom in late 2021 and early 2022, the NFT and crypto markets seem to be very connected right now. It was thought that investors would be less interested in buying NFTs if the cryptocurrency that they were tied to went up in US dollar terms.
“But they [now] seem to be in lockstep,” said Petscher.
Petscher thinks that the general pessimism in the market is causing prices to go down to attract what customers are still around. This is instead of falling crypto values making the price of NFTs go up to make up for it.
“There’s not a lot of liquidity and people are worried that there’s not going to be buyers when they’re looking to sell, so it is a race to the bottom,” Petscher said. “We can see that with prices across the board.”
The world is still run by apes.
In July, Yuga Labs projects again dominated the top of the best-selling list. Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), and CryptoPunks were all in the top five.
Otherdeed, which sells land plots for the future BAYC metaverse project “Otherside,” came in fourth place for the month with more than US$30 million in transactions.
Even though it just came out in May, this project became the eighth to reach a total of $1 billion in sales.
Sorare, a collection with a soccer theme, came in third on CryptoSlam’s list with secondary sales of about $30 million in July. As another way to follow the game around the world, Sorare lets people buy and sell players as part of a global fantasy football tournament.
Petscher told Forkast that he thinks sports tokens will be a big growth area because they are often more useful than other tokens.
The WAGMI United token was made by the U.K. soccer team Crawley Town FC, which plays in a lower league. Fans who own the digital token can vote and take part in team decisions.
Art is another area where things are changing, says Petscher. As more people start making NFTs, the focus is shifting away from them being just profile pictures and more toward them being full-fledged works of art.
Petscher said“It’s just the tip of the iceberg. Art [NFTs] are just starting, it’s here in a big way and it will just keep growing.”
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