What does the recent NFTs market plunge mean to investors?
The cryptocurrency market always spins with both good and bad news, the non-fungible token field is no exception. Although legendary names keep engaging themselves with NFTs by introducing collections like what the Starbucks coffee brand has been doing recently, the overall performance of these digital assets is not as good as expected. Since the big boom at the end of 2021 and the beginning of 2022, NFTs’ global sales volume experienced a serious downswing. Meanwhile, some iconic NFT collections fell harshly in value, prompting controversial questions about their long-lasting viability. There must have been various possible explanations for the phenomenon and advice for NFTs lovers. Let’s find out with News Coincu.
NFT statistics saw drastic downswings
Sales of NFTs surged at the beginning of the year. Unfortunately, the market’s negative tendencies, which were more severe in the second week of May, did little to increase the number of NFT projects sold in the next months. August has become the month with the lowest NFT trading volume this year and a year back. If this trend continues, we will see more bleeding in the market, many people will lose interest and leave the NFTs market until something new comes along and brings a new wave of market participation.
All areas of the NFT market are seeing a significant drop. According to DappRadar, a top-notch reporting and tracking Dapp, the emerging Solana-based marketplace – Magic Eden’s volume on August 30th was $2.76M, showing a drastic plunge from $7.04M in May 2022. It unmistakably demonstrates a volume drop of roughly 59%.
The biggest NFT marketplace – OpenSea, showed the same decreasing trend as its rising rival, where trading volume dropped from $34.37M to $12.31M in 4 months between May and August 2022.
The negative market signals apply to other popular NFT marketplaces such as LooksRare. The volume of LooksRare in August 2022 was $13.51 million, down from $30.55 million in July 2022, exhibiting a loss of about 56%.
Feasible explanations for the down in NFTs trading and value
Well awareness of scammers
There are many dubious blockchain ventures, but the NFT sector is especially rife with fraudulent practices. Shady developers are selling basic assets on marketplaces, making up a sizable chunk of the NFT market. Given the relative simplicity of putting up a website and selling false works of art or sports memorabilia, this presented a golden opportunity for scammers. Additionally, the market is reacting appropriately. One of the main causes of the price decline’s sharp decline was the lackluster response to dubious NFT market operations. People are just not using these fundamental markets, and the market is not growing.
Massive cryptocurrency sell-off
According to CoinMarketCap, the worldwide cryptocurrency market has decreased from $1.02 trillion to $970.03 billion, a 15% decline since January 2022. Recently, all main cryptocurrencies have been trading in the red, putting even long-term investors to the test. The floor price of NFTs was directly impacted when the price of Ethereum fell by more than 50%.
NFTs’ lack of distinct use cases
NFTs’ key selling point is their practical use. Everything that is sold on a marketplace can subsequently be sold again. Even though it works fantastically for digital art, it is not particularly helpful for digital assets like footwear. They cannot be used in the way physical shoes be used once you sell them to others. It is difficult to imagine how NFTs can be valuable because there are no obvious use cases for them in the real world. Because of this, almost all widely used NFTs are works of digital art. Because of this, almost all widely used NFTs are works of digital art. In the actual world, it is the only thing that makes sense. Furthermore, while controlled markets may contribute to the rise in the value of NFTs, they won’t be worth anything if the blockchain project at its core fails.
What way should NFT investors go?
Before finding the possible solutions to the NFT fall in values and overall volumes, it is indispensable to clear out the question: “Whether declined NFT volumes mean negative?”. It does sound negative. However, it opens more opportunities for investors rather than giving them a chance to quit the market.
To experienced investors, it is a common practice in this cryptocurrency market that when prices go down, they tend to switch their investing strategies to different approaches since they show no interest in waiting for the profitable price again (not mentioning top valuable NFT collections such as BAYC, CryptoPunks, Moonbirds, Doodles,…).
This strategy will be true for investors with enough experience in the market, which is not available to market newcomers. However, either degens or safe investors should consider the current NFT market symptom a good time to take a rest and earn more insights on new hidden gems. The collections that perform well during the bear season will be extraordinary assets for investors to thrive and generate more profits.
Also, this time is regarded as a hatching period for the collections to create new trends. Investors, of course, do not want themselves to be late. So, why do not take this time to conduct research, cultivate knowledge and prepare for what’s coming next? Again, it is not easy to x100 profits from NFTs anymore cause there are too many introductions to the market. Safe steps might take time. However, it is worth the wait.
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.
Issac
Coincu Ventures
Author
NFT
What does the recent NFTs market plunge mean to investors?
The cryptocurrency market always spins with both good and bad news, the non-fungible token field is no exception. Although legendary names keep engaging themselves with NFTs by introducing collections like what the Starbucks coffee brand has been doing recently, the overall performance of these digital assets is not as good as expected. Since the big boom at the end of 2021 and the beginning of 2022, NFTs’ global sales volume experienced a serious downswing. Meanwhile, some iconic NFT collections fell harshly in value, prompting controversial questions about their long-lasting viability. There must have been various possible explanations for the phenomenon and advice for NFTs lovers. Let’s find out with News Coincu.
NFT statistics saw drastic downswings
Sales of NFTs surged at the beginning of the year. Unfortunately, the market’s negative tendencies, which were more severe in the second week of May, did little to increase the number of NFT projects sold in the next months. August has become the month with the lowest NFT trading volume this year and a year back. If this trend continues, we will see more bleeding in the market, many people will lose interest and leave the NFTs market until something new comes along and brings a new wave of market participation.
All areas of the NFT market are seeing a significant drop. According to DappRadar, a top-notch reporting and tracking Dapp, the emerging Solana-based marketplace – Magic Eden’s volume on August 30th was $2.76M, showing a drastic plunge from $7.04M in May 2022. It unmistakably demonstrates a volume drop of roughly 59%.
The biggest NFT marketplace – OpenSea, showed the same decreasing trend as its rising rival, where trading volume dropped from $34.37M to $12.31M in 4 months between May and August 2022.
The negative market signals apply to other popular NFT marketplaces such as LooksRare. The volume of LooksRare in August 2022 was $13.51 million, down from $30.55 million in July 2022, exhibiting a loss of about 56%.
Feasible explanations for the down in NFTs trading and value
Well awareness of scammers
There are many dubious blockchain ventures, but the NFT sector is especially rife with fraudulent practices. Shady developers are selling basic assets on marketplaces, making up a sizable chunk of the NFT market. Given the relative simplicity of putting up a website and selling false works of art or sports memorabilia, this presented a golden opportunity for scammers. Additionally, the market is reacting appropriately. One of the main causes of the price decline’s sharp decline was the lackluster response to dubious NFT market operations. People are just not using these fundamental markets, and the market is not growing.
Massive cryptocurrency sell-off
According to CoinMarketCap, the worldwide cryptocurrency market has decreased from $1.02 trillion to $970.03 billion, a 15% decline since January 2022. Recently, all main cryptocurrencies have been trading in the red, putting even long-term investors to the test. The floor price of NFTs was directly impacted when the price of Ethereum fell by more than 50%.
NFTs’ lack of distinct use cases
NFTs’ key selling point is their practical use. Everything that is sold on a marketplace can subsequently be sold again. Even though it works fantastically for digital art, it is not particularly helpful for digital assets like footwear. They cannot be used in the way physical shoes be used once you sell them to others. It is difficult to imagine how NFTs can be valuable because there are no obvious use cases for them in the real world. Because of this, almost all widely used NFTs are works of digital art. Because of this, almost all widely used NFTs are works of digital art. In the actual world, it is the only thing that makes sense. Furthermore, while controlled markets may contribute to the rise in the value of NFTs, they won’t be worth anything if the blockchain project at its core fails.
What way should NFT investors go?
Before finding the possible solutions to the NFT fall in values and overall volumes, it is indispensable to clear out the question: “Whether declined NFT volumes mean negative?”. It does sound negative. However, it opens more opportunities for investors rather than giving them a chance to quit the market.
To experienced investors, it is a common practice in this cryptocurrency market that when prices go down, they tend to switch their investing strategies to different approaches since they show no interest in waiting for the profitable price again (not mentioning top valuable NFT collections such as BAYC, CryptoPunks, Moonbirds, Doodles,…).
This strategy will be true for investors with enough experience in the market, which is not available to market newcomers. However, either degens or safe investors should consider the current NFT market symptom a good time to take a rest and earn more insights on new hidden gems. The collections that perform well during the bear season will be extraordinary assets for investors to thrive and generate more profits.
Also, this time is regarded as a hatching period for the collections to create new trends. Investors, of course, do not want themselves to be late. So, why do not take this time to conduct research, cultivate knowledge and prepare for what’s coming next? Again, it is not easy to x100 profits from NFTs anymore cause there are too many introductions to the market. Safe steps might take time. However, it is worth the wait.
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.
Issac
Coincu Ventures
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