The NFT market in the last 4 months, has been on a bearish trend as many have suggested that the sector in the cryptocurrency space has lost its appeal, due to the current crypto winter that has seen massive selloffs from a majority of the crypto assets we have seen today. Due to the lack of interest and investments pouring into the space, data from DappRadar reveals that the NFT transaction volume failed to hit $1 billion, as it recorded approximately $900 million, in July 2022. The last time this happened was June 2021.
Its no news that the NFT market is facing a historically bearish period. Liquidity is down, prices are heavily influenced by the decline in the value of cryptocurrencies, and the potential profit from reselling is not very high. As a result, many users have decided to liquidate their investments in the NFT market, waiting for better times or moving to positions commonly known as “holding”, the trading blocking until the “crypto winter” has passed.
The trading volumes measured revealed that the market is contracting, with a decrease of 25% MoM. Also, the number of traders has also decreased by 8% MoM but still up 40% from July 2021. The market is very primarily dominated by the four projects owned by Yuga Labs: CryptoPunks, Bored Ape Yacht Club, Mutant Ape Yacht Club, and Otherdeed for OtherSide, which alone represent more than $160 million dollars traded in July. In other words, Yuga Labs represents just over 20% of the entire NFT market during the total trading volume of July 2022.
Although the NFT market failed to touch a billion in transaction volume in July 2022, there are still some upsides when it comes to gaming, metaverse, and building in the ecosystem. According to the report, it stated, “However, crypto, NFT, and web3 are still functional and will remain so. This crisis may be viewed as a quick market recalibration that has eliminated harmful “ponzinomics” ventures that wouldn’t have withstood the test of time. It’s time to stay strong and build. The projects that succeed will create the groundwork for an excellent bull run.”
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