NFT Sales In Q3 Of The Year Continue To Weaken As Crypto Winter Is Not Over Yet

NFT sales continue to decline sharply. (photo: doc. pixabay)

JAKARTA - Blockchain tracker DappRadar reports that sales of non-fungible tokens fell sharply in the third quarter. This is because many crypto investors are now sinking into the “crypto winter” and demand for digital assets such as highly speculative NFTs is showing little sign of picking up again.

A non-fungible token (NFT) is a type of blockchain-based asset that represents a digital file such as an image, video, or item in an online game. The product exploded in popularity in 2021, as crypto-rich speculators rushed to cash in on the price hikes. But sales volumes have slumped in recent months.

According to DappRadar, in the third quarter of 2022, there were only US$3.4 billion (IDR 52 trillion) in NFT sales, down from US$8.4 billion (IDR 128.3 trillion) in the previous quarter and US$12.5 billion (IDR 191 trillion) at the peak of the market in the first quarter of this year.

While the nascent NFT market benefited from rising cryptocurrency prices and heightened risk appetite among investors in 2021, this has changed sharply in 2022, as rising central bank interest rates encourage investors to dump riskier assets. Bitcoin is trading at around $19,000, down from a peak in November of $69,000.

The largest NFT sales market, OpenSea, fell for the fifth straight month in September.

“I think what is unique about this environment is the intersection of the macroeconomic downturn and the crypto winter,” said Devin Finzer, CEO of OpenSea.

"The previous crypto winter was a bit more isolated just to crypto prices so for that reason, I think it's wise to be conservative about how long this can last," Finzer added.

But he said the company was in a "good place financially" and he was excited about NFT's long-term potential, describing the decline as a "development phase".

Meanwhile, according to market tracker NonFungible.com, the number of weekly NFT buyers has also more than halved from its peak in late January.

According to data from Art Market Research, the fast-paced traditional art market has also experienced the same thing as sales figures have dried up, as NFT sales at Christie's, Sotheby's, Phillips and Bonhams combined to 8.4 million pounds (IDR 144.7 billion) this year. That figure is down from the previous 127 million pounds (IDR 2.1 trillion) at the same time last year.