The crypto winter still rages on in the wake of the Terra fiasco and countless great ones crypto lending companies go bankrupt.
As it turns out, cryptocurrency’s blockchain brethren, NFTs, aren’t doing too well either.
The highly volatile speculative investments symbolizing digital assets on the blockchain are feeling the crypto winter effects. Trading volume on the largest NFT marketplace, OpenSea, has fallen by as much as 99 percent in the four months between May and August 2022, according to data from the decentralized app store. DappRadar and reported by Fortune.
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The sharply declining popularity in the NFT market is even greater when you look at the financial figures. OpenSea saw approximately $2.7 billion in transactions on May 1. On August 28, the platform saw just over $9.3 million in trades.
However, celebrities and brands continue to promote NFT projects in hopes of filling their digital wallets.
In fact, celebrities selling NFTs without proper disclosure have become so widespread that the consumer watchdog’s nonprofit Truth in Advertising warning letters to a number of celebrities, such as Justin Bieber and Reese Witherspoon, about their cheating.
At the MTV VMAs last Sunday, on that same August 28, Eminem and Snoop Dogg took the stage and, while performing, were transformed in 3D models of their respective Bored Ape Yacht Club NFTs. The Bored Ape aspect of the performance caused many viewers to ask…Why?!
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But if you’re familiar with either artist, you know about them outings in the NFT space in recent years. Snoop Dogg, in particular, has gone all in on non-fungible tokens, because he $44 million just earlier this year from NFT’s sales of his latest album.
However, earlier this year was a very different time for NFTs. Today, the value of Bored Ape Yacht Club NFTs, easily the most popular of the NFT projects, has also fallen. At its peak on April 30, the bottom price for a Bored Ape NFT was 154 ether, the cryptocurrency traded on the Ethereum network, but as of September 2, the bottom price was around 75 ether, representing a drop of more than 50 percent. where the. It should also be noted that the value of ether has also fallen, from about $2,800 in April to $1,500 in September. So the Bored Apes took quite a beating.
And the downturn isn’t just on OpenSea either. Other NFT marketplaces are feeling it too. Coinbase, the largest crypto exchange in the US, launched its own NFT marketplace in May. It hasn’t gained any real traction, often just recorded around a low five digit sales per day. Video game retailer Gamesstop too launched its own NFT marketplace in July and has seen about same activity…or lack thereof.
However, some brands read the room. Specifically, the studio behind the hugely popular video game Minecraft announced it wouldn’t get involved in NFTs.
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Still, brand love with NFTs continues. Starbucks is looking for launch a loyalty program that uses NFTs, luxury brands such as Gucci and Tiffany to get join the non-fungible token promotion, and even be M&Ms letting go a Bored Apes version of his candy.
Cryptocurrency has faced downturns before and has made comebacks. But the much newer NFT phenomenon faces an even bigger challenge: brands believe in it, but consumers don’t. That’s a big problem to overcome.