NFT bubble popped? Study shows NFT sales dropped 90% over last month

According to a recent analysis by crypto news site Protos, non-fungible token (NFT) sales plummeted 90% since the record sales on May 3. Market data shows over 130,000 NFT sales in a single day, and 30 days later, NFT sales dropped more than 35% last month, reaching over 84,000.

Since peaking on May 3, when $102 million worth of NFTs were sold that day, weekly sales have dropped by 90 percent, says Protos’s study on Friday.

About $9.2 million worth of crypto-collectibles were sold in the past week, representing nearly half of the entire NFT market.

NFT collectibles (like CryptoPunks and Hashmasks) have so far proven the most resilient and still the biggest of the seven markets ranked by NonFungible.com.

A non-fungible token (NFT), is a unique digital token encrypted with an artist’s signature and which verifies its ownership and authenticity.

NFTs can represent ownership of digital assets, including images, video, music, trading cards, cryptocurrency wallet names, and even land within online virtual worlds.

The high-profile digital assets to go up for sale as NFTs include Twitter CEO Jack Dorsey’s first tweet, which fetched $2.9 million, as well as the classic viral video ‘Charlie bit my finger’ which brought in $761,000.

Their popularity boomed in February and March. A single NFT artwork by the digital artist Beeple fetched $69.3 million at Christie’s, in the first sale by a major auction house of artwork with no physical form.

But the market’s craze appeared to start cooling.

The study also shows that the number of active NFT wallets has slid from 12,000 per day to 3,900, which is a loss of close to 70%. Other top NFT sales stemmed from Sorare, Meebits, Decentraland, Superrare, and the Sandbox.

One Meebit NFT sold for $2.6 million last month while a single Cryptopunk sold for $1.4 million. Four other Meebit NFTs below the recent Cryptopunk NFT sale, sold for $1 million each.

In the last seven days, Cryptopunks has seen more than $4.8 million in 79 unique sales. Meanwhile, Sorare data is different, with $2.4 million in weekly sales but across more than 10,000 sales. The stats from the protos.com study give the publication the opinion that the NFT bubble has popped and the report’s author concludes by highlighting this subjective valuation.

Enthusiasts claim that decreasing sales are not a bubble’s burst; rather it’s a normal fluctuation in a volatile market.

‘The market trends observed in the first half of 2021 are only a reflection of the general runaway around cryptos and the NFT industry,’ wrote the blog NonFungible.com.

‘While all of these signals are extremely encouraging at the moment, we must not lose sight of the overall trajectory of the NFT industry, from its beginnings at the end of 2017 to today,’ the boosters wrote.

And there are signs that NFTs continue to gain broader acceptance, with auction house Sotheby’s announcing this week that it is holding a new auction featuring the ‘first’ NFT.

Bidding begins at $100 and buyers can pay in ordinary money or in the cryptocurrencies Bitcoin and Ether. For each purchase, the NFT will be sent to the buyer’s cryptocurrency wallet; no physical artwork changes hands.

Sotheby’s first NFT auction was in April, with digital works by the artist known as ‘Pak’ fetching $16.8 million.

Michael Bouhanna, contemporary art specialist at Sotheby’s in London, said although the April sale was dominated by crypto-native buyers – people who have profited from recent cryptocurrency price gains – NFT artworks are increasingly appealing to existing clients.

‘I’ve seen some crossover with our collector base, very active in contemporary art, who are very intrigued and wanted to learn more,’ he said.