NFT Market Down 89% – Only 4 NFT Types Show Life
Recent data from Protos shows that NFTs are in rapid decline — this is in direct contrast to the dizzying highs that the market saw at the start of the year. Within the space of one month, the NFT market has shrunk from $170 million in sales per week to a mere $19.4 million– an 89% drop. This has left people asking what the future holds for NFTs, questioning whether the market has died.
Collectibles Reign Supreme
While the whole NFT market has been falling, some categories performed better than others. By far, collectibles have performed the best out of all major NFT types. Around the first week of May, when NFTs were peaking in popularity, collectibles made up $156 million in sales, making them by far the most lucrative category. To put this into perspective, the second most lucrative category, crypto-art, made up only $4.98 million.
Analyzing data from this past week, collectibles are still the top performer, although now they only account for $9.24 million in sales. However, the current second-highest performer is actually metaverse NFTs, or virtual goods, making up $3.32 million. The third-highest performer is sports collectibles, at $3.17 million, putting crypto-art at a disappointing fourth place with only $3.05 million.
It is fascinating to see just how much has changed in the NFT market over one month. Crypto-art’s fall from grace is saddening and perhaps surprising, considering how much coverage it received in the media, triggered by artists such as Beeple. Although, this data suggests that crypto-art was never that big of a market even at its peak.
The dominance of NFT collectibles should have been expected, as they also exploded during the 2017 bull market (via CryptoKitties), as well as this 2021 market. So far, they have proven themselves to be highly resilient and very much in demand.
What Comes Next for NFTs?
Even though NFTs peaked in May, we have known they were in decline from as early as April, when their sales dropped by almost 50%. This, coupled with the more recent statistics, has led some people to fear that NFTs have died, however, this may not be the case. What is more likely is that the NFT market bubble has popped – and that is not necessarily a bad thing.
All bubbles are unsustainable, and a popped bubble does not mean a market will die – think about the infamous dot-com bubble. Most popped bubbles are no different from standard market corrections, and market corrections are healthy for establishing the true value of a good or asset.
Crypto-art might have fallen by the wayside, but collectibles and metaverse NFTs have shown themselves to be the most popular and economically sustainable assets in the market so far, so it is likely that these will continue to see some traction. There is also a high chance that gaming NFTs will flourish in the future, especially considering how GameStop has just recently entered the market.
NFTs are most certainly still in their infancy, so it is unknown which types will be the most lucrative and useful in the months and years to come. For instance, there is huge potential for utility NFTs, or NFTs that serve some function outside of collecting or gaming.
This includes areas such as legal contracts, real estate, and tokenizing real-world assets. Although for the time being, it looks like the NFT craze is diminishing, so it might be a while before we get to truly find out what direction the market heads towards.
Do you think NFTs will still be popular by the end of the year? Let us know in the comments!