The bitcoin bull run has come to a tentative end with the crypto market huffing and puffing under its own weight.
This time around though, “the end of crypto days” has come with no rapid liquidation and no price dumping that sent crypto under its pre-rally levels. In fact, many have called the present slump a “self-correction”.
However, one industry predicating its success on the cryptocurrency bullish run is in the doldrums as non-fungible tokens or NFTs have plummeted by 90% in terms of total volumes. Cryptocurrencies have found a natural hold line and have not slumped underneath it.
Even Dogecoin seemed to crash at $0.30 and started climbing right back up buoyed up by a Coinbase listing. NFT sales peaked at $170m in transactions at the beginning of May but they have crashed to just $19.4m since. This has prompted a few gleeful skeptics to argue that NFTs are out.
Is the end for NFTs near or is the market correcting itself?
The question that naturally comes to mind is what that means for the NFT market. Are non-fungible tokens finally dismissed by savvy consumers with plenty of disposable income after millions were placed in sales already?
Or is the market tackling the initial and rather unrealistic hype that should now settle the NFTs price to something much more reasonable and affordable? One thing is for sure and that is that the NFT landscape is shifting just like the crypto market did before it.
It’s not so hard to imagine the connection between the general crypto market and interest in NFTs. When bitcoin lost 30% of its value, smaller coins lost even more, around 50% or even 60%, with consumers perhaps fearing that a withdrawal had started and their investment would not be worth very much soon.
Just like the cryptocurrency market, NFTs may have become a victim of their own success. According to Oasis Labs head of product marketing, Andrew Miller, the initial speculation that surrounded these assets’ value and pricing has contributed to their price crash and withdrawal of interest.
The 90% drop in transactional volume is still surprising given that just a week ago another report argued that NFTs tripled, referring to the period between January and early May.
If there is one thing that is making consumers reluctant to buy NFTs as readily, it is the growing awareness behind what NFTs actually are, and they are risky. Just like “cloud computing”, NFTs must have a physical representation even though they are touted as a digital artwork.
However, NFTs are just like anything else – a digital string of code located somewhere in the world. If someone decides to use the kill switch, your digital artwork will disappear, no matter how much you have paid for it. Of course, there are obvious exceptions where you can own the code, but the truth is consumers are waking up and NFTs are not as hot as they used to be.
The hype is almost over. New and more sustainable NFT marketing strategies are needed to inspire consumers once again.