Is this the end for NFTs?
Crashing prices, crumbling projects, and unprecedented losses have been the hallmarks of the crypto space in 2022. The cryptocurrency space has been brought down to earth from the highs it attained in 2021. Prior to now, only a few people would have taken the precautionary advice of crypto evangelists seriously. Still, wondering what this piece of advice is? It is none other than this — only invest what you are willing to lose in crypto.
Here we are at the tail end of 2022. All we can do is look back at the glorious heights of the 2021 bull market while we lick our wounds from the catastrophic losses that have been sustained in the 2022 bear market.
Still, you may be forgiven if you consider your loss minimal if you had invested in crypto coins and tokens. NFT Investors have taken the biggest hit in this bear market. Statistics have it that as much as 97% of the NFT market has been wiped out in the ongoing crypto winter.
The big question then is this: Will this spell the end for non-fungible tokens?
NFTs on Cloud Nine
The NFT space came into the limelight in 2021. Artists such as Beeple and XCOPY led the way with record sales. It did not take long for this new digital goldmine to gain momentum. In no time, several new collections emerged, and the NFT space became synonymous with images of apes.
It did not take long for brands to also jump on the NFT train. Today, several global brands across different industries have ventured into NFT. Some notable names in the space include Coca-Cola, Lamborghini, Nike, and Adidas. At the peak of the last bull market, the NFT space was valued at around $17 billion.
The Woes of 2022
The crypto winter started in April 2022, and it is set to play out till the end of the year. Early signs indicate that the bear market will continue into 2023. While the bear market has been epitomized by the news of crumbling giant crypto projects like Three Arrows Capital, Celsius, and FTX, it has been a terrible year for the NFT space altogether.
A report has shown that NFT trading volume plummeted by more than 60% between the first and second quarters of 2022. Figures show that NFT trading volume dropped from $33 billion in Q1 2022 to just above $1 billion in Q2 2022. This figure dropped to 537 million in Q3 2022. This represents another 60% drop in NFT trading volume.
In terms of NFT sales volume, there has been a steep drop so far. Sales dropped from $12.5 billion in Q1 2022 to $8.4 billion in Q2 and $3.4 billion in Q3 2022.
Is this the end for NFTs?
You might be tempted to say that the NFT frenzy had reached its end. Nevertheless, a keen look at adoption among top brands could easily change your mind.
Not long ago, a report from Dune Analytics made the rounds. The report showed the top brands that have made sales in NFT. Among them are brands such as Nike, Tiffany, Gucci, Budweiser, and D&G. Collectively, these brands made about $280 million in NFT sales.
The interesting part of this report is not the number of top brands that made the list. The main point lies in the diversity of the industries that these top brands signify. Notably, the industries captured in the report cut across fashion, consumables, media, and luxury items.
The point here is that more brands are beginning to adopt NFTs, and this could be the very foundation upon which NFTs will resurrect. Business adoption is only just beginning. It will only be a matter of time before NFTs become a part of everyday life.
Already, NFT adoption has started to emerge in sectors such as health, supply chain, eCommerce, entertainment, and real estate. The capacity to represent unique physical items while proving ownership and authenticity makes NFTs an easy attraction. It will be a fallacy to conclude that the ongoing bear market will mark the end of NFTs.
Conclusion
There is no end in sight yet for the current crypto market situation. This also means that the woes of the NFT space will remain for the time being. Notwithstanding, one thing is certain — NFTs are here to stay. Their unique attributes will lay the foundation for their emergence during the next crypto bull run.
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