The NFT Industry Is Showing Signs of ‘Slowing Down,’ Says Report

After a roller-coaster ride last year, it appears the non-fungible token (NFT) train has hit the buffers. 

A year on from when the most expensive NFT sold for $69.3 million, the industry is now showing signs of decline with OpenSea’s sale volume dropping to $2.5 billion last month from a high of double that in Jan.

The number of people purchasing digital collectibles, however, dropped to 635,000 with an average price of $427 last month.

“Obviously the enthusiasm and interest that we had at some periods last year is not here anymore,” Pablo Rodriguez-Fraile, an NFT enthusiast, told Reuters. “I think we achieved something that wasn’t sustainable.”

On the other hand, Modesta Masoit, the director of finance and analytics of DappRadar, believes that the market is in a consolidation stage rather than a decline. She thinks Russia’s invasion of Ukraine could be a good reason why investors are showing caution.

“Everybody was expecting that there was going to be a consolidation period,” she told Reuters. “It’s not going away, it’s just consolidating.”

The average price of an Art Blocks NFT, a pack of computer-generated collectibles, was $15,000 last year Sept. However, the prices dropped to around $4,200 in March. 

But the prices of six-figure NFTs, such as the Bored Ape Yacht Club collection, remain around $300,000. 

NFT transactions broke the $17 billion mark in 2021

The total transaction volume of digital collectibles broke the $17 billion mark in 2021. The number of NFT holders and traders reached 2.5 million while the number of people buying rose to 2.3 million, much higher than the 75,000 in 2020.

However, according to a survey by digital security company Privacy HQ, nine out of 10 respondents said they had experienced some form of scam, half had lost access to their NFTs at some point, and two-thirds had panic-sold in the past.