Sales of non-fungible tokens soared to a record level in January, as the assets gained popularity among crypto investors, mainstream consumers, and even celebrities. But as 2022 comes to a close, it's a whole different story.
Global monthly NFT sales plunged 89% in November compared to their all-time high of more than $4.9 billion in January, according to blockchain data tracker CryptoSlam. The decline threatens markets, including those launched by GameStop and Coinbase Global, which sell off the once hot digital assets. It also reflects a broader crypto path sharpened by the implosion of hedge fund Three Arrows Capital, the bankruptcy of cryptocurrency lender Celsius, and the spectacular crash of digital asset exchange FTX.
“Trust has taken a drastic hit,” said Ian McMilan, director of growth at Mojito, a software startup that helps top brands build NFT platforms.
While GameStop's NFT marketplace posted record daily volume of more than $2.1 million on July 12, sales have been shaky since the video game retailer launched the platform five months ago, according to data provided by DappRadar. The blockchain analytics firm, which tracked GameStop NFT's blockchain transactions on the Loopring protocol, reported just over $4,820 in transactions on Oct. 30, the day before GameStop began selling NFTs based on the ImmutableX protocol.
It's unclear how the platform is currently doing since DappRadar stopped reporting GameStop NFT sales on November 9. A DappRadar spokesperson said the company and GameStop decided to disable tracking because without the ImmutableX volume, the data would be misleading, but the company expects to resume tracking “for the foreseeable future.”
Meanwhile, GameStop ended its two-month pilot partnership with FTX US by selling the crypto exchange's gift cards on Nov. 11, the same day FTX filed for bankruptcy, according to a report. cheep, which said it will “provide full refunds to affected customers.” GameStop did not respond to a request for further comment.
The NFT marketplace for FTX US, the US subsidiary of FTX, is directing visitors to the bankruptcy process of the cryptocurrency exchange. NFTs created or “minted” using the platform also link to the same bankruptcy webpage or display an error message when viewed on other NFT marketplaces like Magic Eden.
Declining interest in NFTs is also affecting Coinbase's platform, which got off to a slow start when it launched in May. Trading volume has dropped significantly since the market's all-time best-selling day in September, according to blockchain tracker Dune Analytics. While Coinbase NFT posted over $533,500 in sales on Sept. 9, it posted volume of just over $5,000 on Dec. 26, a 99% drop.
The platform has recorded $7.2 million in all-time sales volume since its inception, according to Dune Analytics. That's less than $8.2 million from OpenSea, the #1 NFT marketplace by trading volume, recorded in the last 24 hours, according to DappRadar. But even OpenSea has seen sales hold steady at $186 million in the last 30 days.
Asked what Coinbase NFT was doing to drive sales, Max Branzburg, Coinbase's consumer products group leader, said in a statement that the company had redesigned its Drops program for NFT launches and added a way for NFT collectors avoid paying high derivative fees. of the congestion of the blockchain network.
“In the third quarter of this year, more than 92% of our Drops on Coinbase NFT sold out in less than 24 hours,” he said.
But with new scandals plaguing the industry, an NFT recovery could be harder to achieve, according to Catherine Flick, a lecturer at Britain's De Montfort University who studies the ethical implications of NFT.
“Now that we have seen multiple crypto crashes, the pure monetary value of NFTs is no longer a selling point – most people have lost money on them,” he said in an email to Bloomberg.
Mojito, which has worked with brands such as Sotheby's and the Milwaukee Bucks professional basketball team to develop NFT offerings, has seen some of its clients walk away from assets during the market downturn, especially if they are used for novel marketing campaigns. According to McMilan. However, he said that other companies are still interested in using NFTs in the long term, especially if combined with more traditional products like physical merchandise.
“People just want to sit back and wait a bit and let the storm pass,” he said.
Disclaimer: This story was automatically generated by a computer program and was not created or edited by Journalpur Staff. Publisher: Journalpur.com