Everything has to come to an end at some point… Or does it? The NFT market crash is definitely something scary. But does this mean this is the end of the non-fungible token industry, or is it exactly what it needs? Could this be the move to help NFTs reach their potential and purpose finally?
Here’s the thing. The NFT marketplace volume continues to sink, with the crypto market volume flatlining too. After all, the two industries are interconnected and come hand-in-hand. However, at the unprecedented rate that the NFT industry was growing, everyone expected the bubble to burst at some point. But, this doesn’t necessarily have to be a bad thing. The game isn’t dead, it’s just changed.
So, with that being said, we’re going to break down the NFT market crash and what it means for NFT collectors. And, while you’re at it, you might as well join our FREE hub of NFT guides for more knowledge. This way you’ll understand more about how the non-fungible market actually works!
NFT MARKET CRASH
The NFT market crash was, in fact, a long time coming. According to NFT Market Tracker, the number of active wallets trading NFTs over the past year has changed drastically. And referring to a report by Chainanalysis, there were almost 1 MILLION active NFT buyers and sellers. This was all in the first quarter of 2022! However, this number soon declined to almost 491,000 active NFT buyers and sellers. That’s more than half!
After an all-time high with a gigantic BOOM in 2021, it’s finally starting to calm down. In fact, the NFT market value actually went above and beyond normal standards, reaching $40 BILLION in 2021! But, even that growth was not consistent or stable. It was a volatile and rapid peak which, naturally, had to be followed by a decline!
GIANTS COME CRASHING DOWN
One of the biggest and scariest parts of the NFT market crash was the fall of the giants! Some of the biggest and most prominent projects came toppling off their high thrones. Even their blue-chip status couldn’t protect them from what was coming! Some floor prices got cut down by half, and those who are in it for the quick cash lost interest.
The Bored Ape Yacht Club had a peak of 153.5 ETH on May 1st and is now 81.8 ETH according to NFT Price Floor. CryptoPunks’s peak at 84 ETH reached an all-time low of 45 ETH in June, only to pick back up to 74.6 ETH. And, Moonbirds NFT’s high of 38.6 ETH is now at 16.75 ETH. So, yes… The NFT market crash got them good.
But, with the recent crypto crash, what else could you expect?
REASONS FOR NFT MARKET CRASH
One of the biggest reasons contributing to the NFT market crash is problematic people. By this, we’re referring to all the NFT scams, hackers, and rug pulls. Also, people repeatedly auctioned and bought their own NFT to drive value. The entire NFT culture and purpose of the NFT market were warped.
Crypto Coin Crash
According to CoinGecko, this is the third super steep drop in value for the Bitcoin of all time. And, over the past year, it dropped 43.1% in value. Naturally, the Ethereum coin follows suit with a 39.3% decrease over the past year! The Terra blockchain’s collapsed stablecoin all affected many crypto-related projects.
Finally, another reason for the NFT market crash is the decline in investor interest in NFTs. According to Google Trends, the term “NFT” dropped 84% from its last peak. This is the same for the terms “buy NFT” and “sell NFT” both declined almost 80% from their peak! All of which point to a decreasing interest rate in non-fungible tokens.
So, what’s the NFT market crash looking like now? Well, despite everything, people are still actively joining in crypto exchange and NFTs. this means that the market is actually far from dead.
New collections are emerging every day, and big brands are joining! Starbucks just unveiled its web3-based rewards program. Basically, people who know better are calling this a Crypto Winter.
According to a report by gaming platform Balthazar, despite the decline, the total sales volumes to date are still 73% higher than in 2021. They also project a growth of 239% for the NFT market in 2022. Also, according to the CEO of Balthazar, the snow of the Crypto Winter is already starting to thaw. A lot of the leading NFT projects have already started showing signs of recovery. So, bottom line is that the NFT market crash might just be what we need.