Is The NFT Craze Over?
- In 2020, the total sales of NFTs amounted to $250 million, while February alone saw sales of $220 million.
- At its height on February 21, weekly NFT trading volume reached $196.4 million.
- In March, Mike Winkelmann, a digital artist known as Beeple, sold an NFT artwork for $69 million.
- However, things may have taken a downturn, with the average price of an NFT now $1,256 from $4,000 at its peak.
For weeks, the media has been brought to a standstill by a flurry of sales surrounding the crypto asset class non-fungible tokens, popularly known as NFTs.
Enter The NFT Season
NFTs – unique digital assets in a blockchain used to represent digital forms of objects such as music, art, videos, and images, have been around since as early as 2012 – 2013 when Colored Coins entered the crypto space. However, they received renewed interest in 2021, constantly being in the headlines.
NFTs hit the media hard with a string of outstanding, or, in some people’s eyes, scandalous, sales of digitized tokens. The NFT mania made its way into the music, gaming, sports, poetry, art, and luxury industries.
Some sales made people question whether we all lost it during the lockdown. Many observers have linked the sudden interest in the asset class to the covid-19 pandemic. Some of the most eye-catching NFT sales include:
- Beeple’s mega sale: A piece of digital art selling for $69.3 million at an auction.
- The CryptoPunks #7804 and #3100 at Larva Labs both selling for $7.6 million each.
- Canadian singer Grimes selling more than $6 million worth of NFT art in under 20 minutes.
- Jack Dorsey, Twitter’s CEO, selling his first tweet for $2.9 million.
- Former T-Mobile CEO John Legere buying DJ Steve Aoki’s NFT art for a reported $888,888.88.
- An NFT “self-portrait” by Sophia the Robot selling for nearly $700,000.
According to the data tracking site NonFungible.com, more than 160,000 NFT sales were completed in February. Total NFT sales in 2020 were worth about $250 million. However, February alone saw sales exceeding $220 million, according to NonFungible.com.
In March, OpenSea reported that the transaction volume on their platform grew over 100 times in the last six months. OpenSea reported a monthly sale of $95.2 million in February.
Is The NFT Craze Over?
After an impeccable start to the year, there are signs that the NFT craze might just be winding down. The average price for an NFT on April 5 was about $1,256. In February, the average price for an NFT was pegged above $4,000, according to NonFungible.com.
The claim of declining interest in non-fungible tokens is backed by another crypto research firm, The Block. The company reported a similarly large decline for both prices and NFT sales.
According to The Block, weekly trade volumes, as well as other trade metrics for NFTs, have decreased steadily since mid-February.
On the Flipside
- Regardless of the apparent drop in NFT sales, there are still some major transactions ongoing.
- DΞSTINATION HΞXAGONIA, by artist Don Diablo, was recently sold for $1,298,362.38.
- A total of $20.5 million has been sold on the NFT marketplace, CryptoPunks, over the last 24 hours.
The weekly volume, user volume, and transactions on NFT marketplaces all suggest a decline in interest. However, based on the crypto market, we should all know by now that it may be too early to pass the verdict on whether NFTs are done for.
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