The non-fungible token (NFT) market, which saw exponential growth earlier this year, has experienced a sharp decline in trading volumes and prices over the last 30 days. This has led many to suspect that a capitulation is underway, as investors lose faith in the lasting value of digital art and collectibles. Despite the downturn, some experts believe that the market will eventually recover, driven by new innovations and increased demand for NFTs.
The non-fungible token (NFT) market has experienced a significant decline in trading volumes and prices of several NFT projects in the past 30 days. This could be attributed to the bear market extended into 2022 and the first quarter of 2023. According to data from blockchain analytics firm IntoTheBlock, only six of the top 20 NFT collections by market capitalization recorded increased trading volumes over the last 30 days. The remaining collections experienced a significant decrease, ranging from 20% to 99%.
NFT Trading Volume Takes a Hit
The popular NFT collection CryptoPunks, which is the second-largest by market cap, witnessed a 60.30% drop in its trading volume within the past month. Other top digital collectibles like Mutant Ape Yacht Club, Otherdeed, Moonbirds, and Doodles also tanked by 20.16%, 53.09%, 73.57%, and 63.55%, respectively. The ninth-largest collection by market cap, Sewer Pass, launched by NFT company Yuga Labs, saw a staggering drop of 99.16% in its trading volume.
However, Captainz’s NFT collection recorded the highest surge in trading volume at 53.81%, while Bored Ape Yacht Club (BAYC), the largest NFT collection by market cap, saw a 24.67% increase in trading volume. Other projects like Azuki, Autoglyphs, and Meebits also witnessed growth in their trading volumes by 24.49%, 14.70%, and 2.48%, respectively.
Mixed Results in NFT Prices
Although some NFT projects recorded increased trading volumes, only four out of the 20 collections saw a price surge during the same period. The prices of Bored Ape Yacht Club (BAYC) and Meebits dropped by 16.42% and 24.18%, respectively, despite their trading volumes going up. In contrast, CryptoPunks’ price increased by 2.37% despite a decline in trading volume.
Meanwhile, Azuki, Autoglyphs, and Captainz were the only collections that saw growth in all aspects, with price gains of 5.29%, 1.44%, and 36.60%, respectively, accompanied by the surge in their trading volumes.
NFT Market Still Growing
Despite the recent poor performance, the NFT industry continues to grow and evolve. As reported earlier this month, the digital collectibles market had a solid start to the year, with NFT trading volume increasing by 137% to $4.7 billion in Q1 2023, representing the best quarter since Q2 2022. Additionally, NFT sales for the last quarter amounted to 19.4 million, an increase of 8.56% from Q4 2022. This indicates that the NFT market is still growing despite the recent decline in trading volumes and prices of some NFT projects.
In conclusion, it is essential to keep a close eye on the NFT market and carefully analyze the performance of individual NFT projects. This will help investors make informed decisions on whether to hold or dispose of their NFT assets, depending on the current market conditions.