- The world of cryptocurrency is constantly shifting, with Bitcoin (BTC) and Ethereum (ETH) currently capturing much of the market’s enthusiasm.
- In contrast, the once-booming non-fungible token (NFT) market is struggling to maintain its luster.
- A recent Bloomberg report reveals that Google searches for NFTs have hit their lowest point since their rise to prominence in 2021.
Discover the latest developments in the cryptocurrency market as rising Bitcoin and Ethereum prices overshadow the declining interest in NFTs. Explore market trends, expert insights, and future outlooks.
Popular NFT Collections Experience Steep Price Declines
Data from DappRadar indicates a sharp downturn in NFT sales, which have dropped by over six percent to $8.5 billion in the first five months of this year, compared to the same period last year.
This trend is a stark contrast to January 2022, when monthly NFT sales peaked at an astounding $17.2 billion.
The sentiment around NFTs has further waned as the US Securities and Exchange Commission (SEC) moved toward approving exchange-traded funds (ETFs) directly investing in Ethereum.
Shifts in Investor Behavior
With the anticipated approval of these ETFs, investors are reallocating their portfolios, favoring Ethereum over NFTs. Nicolas Lallement, co-founder of NFT data tracker NFT Price Floor, notes that capital rotation, a common trend in the crypto market, could be behind this shift.
Lallement explains, “Ethereum’s growing attractiveness is likely absorbing market capital, leading to price declines in other assets like NFTs.”
NFT Price Floor reports significant price drops in popular NFT collections, with many such as CryptoPunks returning to their 2021 levels, experiencing a 29% decline from their previous year’s low.
Market Correction Looms
NFT collector Daniel Maegaard observes that most NFT collections continue to decline or stay stagnant post the 2021 peak. Maegaard has sold notable blue-chip NFTs, including pieces by artists such as XCOPY, Hackatao, and Coldie.
While collections like XCOPY’s have managed positive returns in the past 90 days, Lallement points out the overall trend leans towards a market correction.
Resilience Amidst Decline
Despite the challenges, the NFT marketplace Magic Eden has shown resilience. Analyst Sara Gherghelas from DappRadar notes an increase in trading activity on the platform, which has been gaining market share. Nonetheless, after reaching record volume in April, trading activity has since seen a decline.
Conclusion
In summary, the NFT market is currently in a state of decline, facing decreasing sales and prices. Although some individual collections are performing well, the broader market trend indicates a continuing correction. Ethereum’s growing appeal seems to be drawing capital away from NFTs, further impacting their market value.
