NFT craze fades as daily sales in June 2022 drop to one-year downtrend

The NFT surge was fueled by a strong and optimistic crypto environment as well as a positive investor attitude. The crypto sector, however, was negatively impacted by the bear market in Bitcoin.

In the year 2021, nonfungible tokens (NFT) gained popularity as A-list celebrities, influencers, and the sports sector eventually discovered a fan interaction mechanism that enabled the general public to profit from their success. Nevertheless, as sales dropped to one-year lows amid the severe bear market of 2022, the euphoria around NFT was unable to hold its position.

Starting in early 2021, the NFT craze sustained its popularity until May 2022, backed by a strong and bullish crypto environment and a favourable investor attitude. Though it had a negative impact on the whole crypto ecosystem, Bitcoin’s (BTC) inability to maintain its all-time high prices.

The total number of daily transactions decreased to about 19,000 with an estimated value of $13.8 million in June 2022, the NFT ecosystem’s lowest month of the year. This figure was last seen in June 2021.

While the fledgling ecosystem saw widespread implementations across multiple use cases last year, daily NFT sales of a comparable amount were still seen as noteworthy.

According to data from nonfungible.com, on September 24, 2021, the NFT ecosystem experienced 224,768 NFTs worth $78.5 million in daily transactions, which was a new high. The biggest transaction, however, was on May 1, 2022, when 118,577 NFTs were sold for a total of $780.40 million.

Declining Ether (ETH) prices, a scarcity of secondary market demand, and inflated gas prices are some of the main aspects that have a negative effect on the euphoria around NFTs. As a result, during the past three months, the NFT market value decreased by around 40% while losing more than 66% of its trading volume.

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

According to a Meta spokesperson, the introduction of NFTs on Facebook would be incremental, starting with a small group of creators in the United States.