Non-Fungible Tokens (NFTs) took the spotlight in 2021 as A-list artists, influencers, celebrities and the esports industry finally found a fan engagement tool that allowed the public to generally capitalize on their success. However, the hype around NFTs failed to hold, as sales plummeted to a one-year low amid the ruthless 2022 bear market.
The NFT craze, which began in early 2021, maintained its glory until May 2022, supported by a healthy and bullish cryptocurrency ecosystem and positive investor sentiment. However, Bitcoin’s (BTC) struggle to maintain its all-time high prices had an adverse impact on the entire cryptocurrency ecosystem.
The NFT ecosystem posted its worst performance of the year in June 2022, as the total number of daily sales dropped to approximately 19,000 with an estimated value of $13.8 million, a figure that was recorded as early as June 2021.
Last year, however, daily NFT sales of a similar amount were considered impressive, as the nascent ecosystem saw mainstream implementations across various use cases.
As data from nonfungible.com demonstrates, the NFT ecosystem witnessed its highest number of daily sales of 224,768 NFTs on September 24, 2021, worth $78.3 million. However, the largest sale in dollar value terms took place on May 1, 2022, when 118,577 NFTs were sold in one day for $780.4 million.
Some of the key factors negatively impacting the NFT hype are falling Ether (ETH) prices, lack of secondary market demand, and unrealistic gas fees. As a result, in the last three months, NFT’s market capitalization suffered a drop of almost 40%, while it lost more than 66% of its trading volume, as data from NFTGo shows.
Amid the bear market, crypto entrepreneurs including Changpeng “CZ” Zhao are helping governments explore use cases for NFTs to identify citizens. Social media giant Meta also recently announced plans to support NFTs for creators.
— Navdeep Singh (@navdeep_ua) June 29, 2022
We launched NFTs on Facebook! I am excited to share with the world what I have been working on.
A Meta spokesperson revealed that the rollout of NFTs on Facebook would be gradual, beginning with select creators in the United States.
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