The market for cryptocurrencies has seen a dramatic drop in sales this year, according to the Wall Street Journal. What could be causing such an immense downturn and what will happen next?
The blockchain industry is going through growing pains as it matures into its early stages with significant volatility. To learn more about how NFTs are performing in the current landscape, we must consider the different ways they can be used at this time.
NFTs have been around since before 2018 started but their use cases had yet to determine when people would start selling them en masse because of fluctuating prices or lack thereof:
The “nft marketplace” is a new platform that allows users to sell their NFTs. The Wall Street Journal reports that the sales are collapsing.
The Wall Street Journal published a contentious piece yesterday saying that “NFT Sales are Collapsing,” based on data from NonFungible. Let’s look at the statements made in the article and provide some explanations and corrections.
The Value of Jack’s First Tweet Isn’t Millions of Dollars
This one doesn’t surprise me at all, and it’s been extensively covered in the mainstream media. Sina Estavi bought $2.9 million for an NFT replica of Twitter Co-Founder Jack Dorsey’s first tweet during the height of the NFT frenzy in March 2021. Unsurprisingly, at least to me, the tweet didn’t get him the $50 million he was looking for in a recent OpenSea auction. At the time of publication, the highest bid was roughly $30,000. Even Mr. Estavi said that the auction’s failure was not a hint that the market was weakening, yet it seems that this is being used as proof.
From a peak of 119,000 in November, the number of active wallets in the NFT market dropped by 88 percent to about 14,000 last week.
This is completely incorrect. This article’s major data source was NonFungible, and although the NonFungible index doesn’t contain many blockchains other than Ethereum, there are plenty of others, such as Flow, Solana, and Palm. NBA Top Shot (on the Flow blockchain) alone had 38,000 unique customers and over a million transactions in March 2022.
Aside from the NonFungible statistics not include many blockchains, this Dune Analytics dashboard plainly demonstrates that wallets haven’t plummeted anywhere near 88 percent from the high in January/February 2022:
The volume of OpenSea is certainly on the rise, and has been for some time:
The NonFungible Report covered the first quarter of 2022.
As you may have heard, Otherside from Yuga Labs sold about $300 million in NFTs on Saturday alone, making it the greatest single day of NFT sales ever. Even if the rest of the data doesn’t persuade you that the NFT market isn’t collapsing, that sale only a few days ago does.
What Is Actually Going On?
I believe we are approaching a time of consolidation. There are already too many Ethereum collections, and more are on the way. A small number of high-quality collections seem to be receiving the money. Personally, I believe that this is not where the ecosystem’s value will be developed on a consistent basis.
I’m not sure where the value will be produced, but MetaMask wallets and the like will not be the source of widespread consumer adoption. For the average customer, that’s just too complicated and full of hacks and frauds. Keep an eye out for projects that are both fascinating and distinctive, as well as high-quality!
The “nft market” is a decentralized platform for trading non-fungible tokens. The Wall Street Journal says that NFT sales are collapsing and cites the lack of liquidity as one of the main reasons for this.
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