Is the NFT Boom Over?

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It seems the NFT boom is over as daily sales in June 2022 plummeted to a one-year low level. A positive investor attitude and a robust and bullish crypto ecosystem served as the foundation for the NFT boom. However, the Bitcoin bear market negatively impacted the crypto ecosystem.

The journey so far: What started the NFT boom?

As musicians, influencers, A-list celebrities, and the sports business finally discovered a fan interaction mechanism that enabled the general public to benefit from their success in 2021. NFTs came to the limelight. However, as sales fell to a one-year low amid the brutal 2022 bear market, the NFT euphoria couldn’t hold its own.

The NFT boom began in early 2021 and maintained its prominence until May 2022. This growth came from a robust and bullish crypto ecosystem and a favorable investment climate. However, the cryptocurrency ecosystem suffered as a result of Bitcoin’s (BTC) inability to maintain its all-time high values.

The overall number of daily transactions decreased to about 19,000 with an estimated value of $13.8 million in June 2022. So far, this is the NFT ecosystem’s most bearish month of the year. And the last time the NFTf market performed this poorly was in June 2021.

However, daily NFT sales of a comparable amount last year were regarded as noteworthy. But this was as the developing ecosystem witnessed widespread adoption across numerous use cases.

According to data from nonfungible.com, on September 24, 2021, the NFT ecosystem had a sales volume of 224,768 NFTs worth $78.3 million in daily transactions. These values were a record high. However, on May 1, 2022, 118,577 NFTs were sold for a total of $780.4 million. And this was the largest daily transaction in monetary terms.

What led to the decline in the NFT boom

Falling Ether (ETH) prices, a dearth of secondary market demand, and inflated gas prices are some of the main factors that led to the decline in the NFT boom. As a result, during the past three months, the NFT market value decreased by around 40% while losing more than 66 percent of its trading volume.

Major Players stepping in to Manage the Bear Pull

Crypto entrepreneurs, such as Changpeng “CZ” Zhao, are assisting governments in investigating NFT use cases for identifying citizens despite the bad market. Facebook, a subsidiary of social media giant Meta, recently revealed plans to enable NFTs for creators.

According to a Meta spokeswoman, the introduction of NFTs on Facebook would be incremental, starting with a small group of American producers.

These efforts could see the declining NFT market rise again, but the question remains- will we experience another NFT boom after this bear cycle?

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