Investor Interest In NFT Reduces, Non-Fungible Token Market Drops

JAKARTA - The non-fungible token (NFT) market experienced a significant weakening in the third week of January 2024. NFT sales volume fell 21.25% compared to the previous week, recording the deepest decline this year. This raises doubts about the future NFT market prospects.

For your information alone, NFT is a unique digital asset and cannot be exchanged for other similar assets. NFT can be in the form of works of art, collections, games, music, or anything digitally representable. NFT is usually created and traded on blockchain, namely decentralized networks that record transactions and verify asset ownership.

One of the factors affecting the NFT market is the blockchain dominance used to create and sell NFTs. Blockchain is the technology that underlies cryptocurrencies, such as Bitcoin and Ethereum. There are a wide range of blockchains competing to attract NFT developers and buyers, with their respective characteristics and advantages.

In the third week of January 2024, there was a significant shift in blockchain dominance in the NFT market. Ethereum, the most popular blockchain for NFT, managed to retake the top position of Bitcoin, the most popular blockchain for cryptocurrencies. According to data from NonFungible.com, NFT sales on Ethereum broke $74.97 million (IDR 1.18 trillion), a 28.78% drop from the previous week. Meanwhile, NFT sales on Bitcoin reached $55.92 million (IDR 883 billion), a 12.62% drop from the previous week.

The decline in NFT sales is not only experienced by Ethereum and Bitcoin. Other competing Blockchains in the NFT market also experienced a fairly deep decline. Solana, a well-known blockchain with its speed and low cost, recorded sales of NFT of $53.69 million (Rp 848 billion), a decrease of 11.85% from the previous week. Polygon and Avalanche, two blockchains that offer high scalability and interoperability, fell by 36.40% and 41.25%, respectively. These five main blockchains experienced a double-digit drop, indicating a broad trend of weakening the NFT market.

On the other hand, there are several NFT collections that still show positive performance in the sluggish market. One of them is Cryptopunks, one of the oldest and most valuable NFT collections on Ethereum. Cryptopunks is a series of 10,000 unique and rare pixel art characters, created in 2017. Cryptopunks emerged as the best-selling NFT collection in the third week of January 2024, with total sales of $13.67 million (IDR 216 billion), up 32.23% from the previous week.

Other NFT collections that record high sales involve blockchains other than Ethereum and Bitcoin. Among them are Bitcoin's Uncategorized Ordinarys, Froganas, Cryptopods, and Dokyo. Bitcoin's Uncategorized Ordinarys is a collection of NFTs made on top of a Bitcoin blockchain, consisting of 21,000 unique abstract images. Froganas is an NFT collection made on the Solana blockchain, consisting of 10,000 cute animationars. Cryptopods is an NFT collection also made on the Solana blockchain, consisting of 10,000 creepy zombies. Dokyo is an NFT collection made on the Avalanche blockchain, consisting of 8,888 cute cartoon characters.

The most expensive NFT collection sold in the third week of January 2024 was Cryptopunk #6,940, with a fantastic price of 507,618 (IDR 8 billion). This cryptopunk has a very rare characteristic, namely it has a cowboy hat and beard. Other striking NFT sales include Lockdealnft #18,858 from BNB for $147,157 (IDR 2.3 billion), an NFT Axie Infinity that sells for $143,559 (IDR 2.3 billion), and an Uncategorized Ordinary purchased for $88,386 (IDR 1.4 billion). These special sales make significant contributions to the overall performance of their respective blockchain chains.

The decline in NFT sales recently came after a spike in late 2023, driven by Ordinary transactions, Bitcoin blockchain-based digital art. However, this trend shifted in 2024, with NFT on the Ethereum network again leading the digital art market.