NFT skeptics have been warning that the craze, maybe even bubble, over non-fungible tokens was unsustainable. Now there’s mounting evidence they were right.
The average sale price of an NFT is now below $2,000, according to market tracker NonFungible. That’s down from over $6,800 in January. Cumulative daily sales have dropped from $160 million in January to $26 million on Thursday.
Primary sales of NFTs have also dipped noticeably, from nearly 26,000 per day at the beginning of the year to less than 3,200 on Thursday. Secondary market sales are down from a January peak of 38,000 per day to just over 7,900.
Secondary sales hit a daily record of 103,765 last September, while primary sales spiked as high as 795,000 last August.
Even some of the best-known NFTs are seeing their values slip. A Bored Ape Yacht Club NFT sale Friday morning seemed like a big-dollar transaction at $224,028.62, but that represented a $67,799.54 loss for the seller, who bought it at the end of January.
Not long ago, NFTs had a total market capitalization of $23 billion, exceeding that of CarMax and Take-Two Interactive Software. Today, it’s just over $10 billion, according to CoinMarketCap.
The drop seems to be caused by a variety of factors, ranging from inflation to the war in Ukraine to increased regulatory scrutiny of NFTs by the Securities and Exchange Commission.
It’s not just skeptics who have been warning of an NFT collapse. Even enthusiastic collectors of the digital art have cautioned that a “cataclysmic market crash” could be on the way, as the field becomes oversaturated because of how versatile and accessible NFTs are.
That cataclysmic shift hasn’t happened, despite the current slowdown. Top NFT collections have fared better than Bitcoin and other cryptocurrencies since the start of the year.
None, however, have outperformed the S&P 500, which itself is down 10.5% year to date.
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