In January, Nonfungible Tokens saw record sales. This was due to their popularity among crypto investors as well as mainstream consumers and celebrities. It’s now 2022, and the story is completely different.
According to CryptoSlam’s blockchain data tracker, CryptoSlam global monthly FFT revenues plunged 89% in December compared with their all-time high in January of more than $4.9 Billion. This is bad news for marketplaces, including Coinbase Global’s GameStop which sell digital assets. It mirrors a wider crypto rout exacerbated in part by the implosion of hedge fund Three Arrows Capital’s bankruptcy. This is followed by Celsius and the spectacular fall of digital asset exchange FTX.
“Confidence has shaken dramatically,” said Ian McMilan. Mojito is a software startup that helps mainstream brands develop NFT platforms.
DappRadar data suggests that the GameStop NFT marketplace recorded a record amount of over $2.1M in daily volume for July 12. But sales have been uneventful since the platform’s launch five months ago. The Loopring protocol was used to track GameStop NFT transaction data. It reported transactions worth just over $4,000. This was the same day GameStop launched NFTs based on the ImmutableX protocol.
DappRadar didn’t report GameStop NFT sales until Nov. 9. The platform’s current status is unknown. DappRadar spokesmen said GameStop and DappRadar had decided to disable tracking for misleading reasons. However, they hope to resume monitoring “in the near future.”
GameStop, which had been in a pilot relationship with FTX US for two months, ended its partnership selling crypto exchange gift cards. FTX filed Chapter 11 bankruptcy on the same date, according to a tweet. GameStop has not responded to a request for comment.
NFT marketplace for FTX US – the American affiliate of FTX – directs users to the cryptocurrency exchange’s bankruptcy proceedings. NFTs created using the platform also hyperlink to the exact bankruptcy web page or display an error message, if viewed via other NFT markets such as Magic Eden.
Coinbase’s platform, which was launched in May but has seen a slow start since then, is also suffering from a falling interest in NFTs. According to Dune Analytics (a blockchain tracker), trading volume has decreased significantly since September’s top-selling day. Coinbase NFT recorded just over $5,000 in volume on Dec. 26, even though it had posted $533,500 more in sales than on Sept. 9. This is a 99% drop.
Dune Analytics claims that the platform’s total annual sales volume has reached $7.2 million since its inception. This amount is lower than $8.2 million for OpenSea – the number one NFT marketplace. DappRadar has only recorded the trading volume for the top NFT marketplace in the last 24hrs. OpenSea however has had sales flat at $186 million in the last 30 days.
Max Branzburg of Coinbase NFT, the consumer product group lead, stated in a statement that they had redesigned their drop program, which allows NFT launchers to make new launches. They also added a way for NFT collectors to avoid high fees from blockchain network congestion.
He claimed that Q3 saw over 92% of Coinbase NFT sales drop in less than 24 hours.
The industry is being plagued by new scandals, making it harder for NFT to recover, according to Catherine Flick of De Montfort University, Britain. Studying the ethical implications of NFTs, she advises on how to overcome them.
“Now, after multiple crypto crashes have occurred, the pure monetary valuation of the NFT does not make sense – most people have lost cash on them,” she explained to Bloomberg in an email.
McMilan reports that Mojito’s clients have been reluctant to sell assets to Mojito after it worked with Sotheby’s or the Milwaukee Bucks professional basketball league to develop NFT offerings. McMilan explained that NFTs are still being used by other companies, particularly when they are combined with more traditional products, such as physical merchandise.
He said that “people are just looking to sit down and wait a little and let the storm pass.”
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
