It’s been a tough few weeks for the cryptocurrency market, with prices tumbling. Perhaps unsurprisingly, this has impacted sales of non-fungible tokens (NFTs), with some projects seeing significant drops in revenue.
There are a variety of reasons why NFTs seem to be crashing. One is inflation; as the cost of living goes up, people have less money to invest in items like NFTs. Another is the war in Ukraine; the conflict there has led to increased scrutiny of NFTs by the Securities and Exchange Commission. Finally, it’s important to remember that NFT prices are still tied to the underlying crypto markets. So when Bitcoin and Ethereum prices go down, NFT prices usually follow suit.
Pivotal stats impacted by the market this week
- According the website Non-Fungible, NFT transactions have decreased 92% from this time last year.
- Bloomberg stated that the average sales price for the Otherdeeds NFT collection by Yuga sank 23% in the last seven days, according to NFT Price Floor. Average sale prices for Moonbirds, a collection of owl-themed NFTs, also dropped 19%.
- dubbed ApeCoin – distributed to BAYC holders in March- is also down about 36% this week
While the current NFT crash may be painful for those invested in the space, it’s important to remember that these kinds of volatility swings are to be expected in any new market. The truth is that if NFTs were up, they would be the only stable thing in the market. Tech companies are feeling the pressure, not just the crypto world. In the last month, Nasdaq has lost 20% of its value. Apple is down 12.5%, and Amazon was down 30% over the same day last month. DappRadar reports that the NFT market grew by about 2,500% in 2021, with about $25 billion spent versus $94 million in 2020. Highs and lows are a norm and should be expected.
Disclaimer: The opinions expressed in the article are for general informational purposes only and are not intended to provide specific financial or investment advice.