- From the Q1 2022 through the fourth quarter, digital art volumes fell by more than $10 billion.
- However, late 2023 and early 2024 were promising times for the NFT market.
The volume of NFT trades in 2023 was almost half of what it had been in 2022. The figure dropped from $26.3 billion to $11.8 billion, as reported by CoinGecko.
Crypto investors have mostly ignored NFTs in the last two years after the meteoric rise in value of blue chip NFTs. Only $50 million worth of digital collectibles were traded on secondary markets in the first week of October, marking the lowest weekly volume of NFT trading since 2020.
Lackluster Performance
The recession, however, has been building gradually. From the first quarter of 2022 through the fourth quarter, digital art volumes fell by more than $10 billion, according to CoinGecko’s analysis. Disappointing macroeconomic circumstances and high-profile failures triggered the sector’s extended demise. These problems caused investors and the general public to lose faith in the crypto industry’s more speculative segments.
NFT marketplace OpenSea, whose valuation was $13.3 billion at one point, has succumbed to the general decline in the NFT sector. Dune Analytics data shows that throughout 2021 and 2022, its trade volume was above $2 billion for nine months in a row. In December 2023, it dropped to around $170 million.
Half of OpenSea’s employees were let off at the beginning of November last year. Coatue Management, an investor in OpenSea, allegedly wrote down its investment by 90% a few days later. However, late 2023 and early 2024 were promising times for NFT trading, thanks in part to the increased number of Bitcoin Ordinal inscriptions and enthusiasm for the Solana ecosystem.
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