SNEAK PEEK
- The Non-fungible token industry fell to as low as 114.4 million in 2022.
- Ethereum (ETH) faced a major hit due to a drop in the value of NFT by 90% since Quarter 3 of 2022.
- ETH rival Solana made headlines despite the backdrop of declining NFT sales and customers.
NFTs, which were once a popular buzzword in 2021, are losing popularity in 2022, significantly when NFT metrics decline. Understandably, massive bulls similar to Ethereum-based NFTs have also had severe consequences.
Thus, the question: Will Ethereum’s competitors take advantage of this opening? If it is the case, may it attempt the highest again?
NFTs as a whole saw a significant decline in 2022. Since reaching its high in January, the volume of NFT purchases and sales has decreased by a staggering 97%. According to data gathered from Dune Analytics, the weekly trading volume of non-fungible tokens across the blockchain industry fell to $114.4 million.
With sales averaging less than $1B per month in Q3, ETH’s NFT quantity in dollar terms decreased by about 90% from January. Simply put, revenues in Q3 were less than $1 billion each month, as opposed to $4.6 billion in Q2.
The reduction indicated both a slower demand for NFTs as well as a decline in the value of ETH, which most NFTs utilize as their foundation currency. In Q3, OpenSea maintained its command over the market share. Additionally, the data showed that Ethereum became significantly less popular for NFTs despite switching to Proof-of-Stake and solving the issue of carbon/energy-intensive usage.
In addition, daily purchasing and selling volumes on NFT fell sharply, although everyday merchants generally saw a far lower reduction. According to Messari’s article, this suggested “a sticky base of loyal clients at around 40,000 each day.”
However, some entities did receive some assistance. For instance, over the past 30 days, the sales volume for Ethereum Names Service (ENS) increased by 133.95%. The sales volume of well-known NFTs like Bored Apes, CryptoPunks, Azuki, and many more decreased compared to last year. Contrarily, CryptoPunks did attempt a reconstruction of type-by-type charts.
Additionally, in Q3 the market cap for the top 100 NFT tasks on Ethereum dropped by 44% ($19 billion) in USD value (QoQ). Overall, the market valuation of ETH-based NFTs decreased by just 27%. (12.2 million ETH).
