In recent news, analysts have noted that the key parameters for non-fungible tokens (NFTs), such as sales, volume, and unique users are dipping low and have touched their yearly low.
This decline in the performance of NFTs has triggered discussions and speculations in the industry. According to data from the Dune dashboard, the NFT sales count across popular marketplaces is 9,887 today. Dune Analytics is a community-based open-source data provider which allows people to publish and access crypto trends.
Notably, data suggested that the metrics have plummeted to their lowest point for this year to date. Further upon examining a wider timeframe, their current status is closer to July 2021.
Additionally, another metric i.e. the count of unique users also stands at a yearly low today. Data suggested that NFT platforms recorded 4,265 unique users, a low that has not been since July 2021.
The report suggested that in addition to unique users and sales count, the NFT trading volume is down to 5,823 Ethereum (ETH) today across major marketplaces as shown in the graph below.
Interestingly, the new marketplace Blur has been significantly managing that volume on its own in December 2022. Reportedly, the average sales size has also plummeted sharply to around 18.7 ETH today.
Giancarlo Chaux, a renowned NFT analyst was the first one to highlight that the NFT marketplace is down today. He took to Twitter to share the trend and also highlighted the trend that the number of unique NFT buyers/sellers is decreasing.
This decline in NFT-related metrics has sparked a discussion amongst the community with people making various assumptions. Many have pointed out reasons such as meme coin season, tax season, and a sharp rise in the Ethereum gas fees. A Twitter user writes:
Hyped meme coins attracted volume, both human and MEV bots… this caused gas to go brrrr, high gas turns off jpg collectors and stalls activity, no mystery… and this is only one factor out of many at play.
Another Twitter user wrote that the level “10k is still a shockingly low number” after two years of a massive NFT boom. He added, “it’s less than an ice hockey arena, we are in the anti-adoption phase somehow.”
The sentiments around NFTs have been mostly bullish in recent times with rising interest and experts showing their confidence. In fact, experts showed confidence even after NFT trading volumes dropped in the wake of the Silicon Valley Bank’s (SVB) collapse.
DappRadar’s data indicated that trading volumes were hovering at around $68m to $74m before the bank’s collapse on March 10, with the figure then falling to $36m on March 12. There was also a 27.9% decrease in daily NFT sales count between March 9 and March 11, with only 11,440 NFT traders remaining active on March 11, which represents the lowest figure recorded since November 2021.
While the NFT volumes hit their yearly low values today, it is yet to be seen if the declining trend is going to continue longer or would hit back shortly. Nonetheless, despite NFTs being a growing marketplace, authorities in some countries have stood up for the asset. A Chinese court stated that NFT collections are online property that must be protected under the country’s law. This statement from the court brought relief to many who were confused regarding the legal status of NFT.