Key facts:
As of mid-February 2022, NFT transactions were down 75%, according to Chainalysis.
Despite the recent drop, the market is expected to continue to grow.
Content sponsored by Poloniex
NFTs (non-fungible tokens) were one of the main trends in the cryptocurrency industry during 2021. But, after the boom Last year, the market experienced a sharp drop during the first months of 2022. Is it a temporary drop or the end of the popularity of NFTs?
sources like Google Trends show that the general interest of the people for the NFT has also decreased. Searches for the term peaked in January 2022, then dropped sharply in early February, coinciding with a 75% decline in transactions, according to the company. chain analysis.
This does not mean that the market has stopped growing, rather, it is a sign that it is stabilizing. The recession of February 2022 gave way to the market recovery by mid-April. There is growth, it’s just fluctuating and at a slower pace than last year.
Calmer waters can be the perfect setting for the application of regulations that protect the consumer from scams, robberies and market manipulations, which were quite common during the NFT rush and highlighted the need to address security flaws in the system and some loopholes.
Slow but sure: the NFT market continues to grow
According to chain analysis, NFT transaction volume has grown significantly since the beginning of 2021, but not constantly. Last year saw a total of $40 billion sent to the NFT market, while so far in 2022, $37 billion has been sent. So the 2021 volume is expected to be surpassed in a matter of months.
Keep in mind that the activity fluctuates from month to month, as happened in August 2021 and January 2022, when there were large spikes. The former was likely fueled by the launch of the Mutant Ape Yacht Club collection, and the latter by the launch of the LooksRare NFT market.
After the peak in January, NFT transactions fell sharply from $3.9 billion the week of February 13 to $964 million the week of March 13. This was the lowest level since August 2021. However, in mid-April the market started to recover until approaching the volumes of early 2022. This rebound was influenced by the launch of the Bored Ape metaverse.
The fluctuations have not stopped the number of NFT buyers and sellers from growing. In the first quarter of 2022, 950 thousand unique addresses bought or sold non-fungible tokens, which contrasts with 627 thousand addresses in the fourth quarter of 2021, as shown in the following graph:
The amount of operations in OpeanSea, one of the marketplaces of larger and more important NFTs, has also increased steadily since March 2021, exceeding 5,000 by April 2022.
Alliances contributing to the growth of the NFT market
With the growth of the NFT market, it stands to reason that more and more companies would like to join. An example of this is Poloniexa global cryptocurrency exchange with 24-hour spot trading volume exceeding $68 million, according to CoinMarketCap.
In May 2022, Poloniex announced a strategic alliance with APENFTanother of the marketplaces of leading NFTs. Thanks to this partnership, Poloniex users will be able to access and trade NFTs directly on the exchange through APENFT. This function is active from May 25.
The association is a sign of the development of the NFT industry and the increase in its reach. Shaun Scovil, general manager of Poloniex, commented on this: “This partnership harnesses our shared potential to increase the reach of NFTs and further develop the industry. NFTs in particular are exciting, because they have a wide range of potential applications. When the metaverse arrives, NFTs will be a big part of that splendid new world.”.
NFTs have transformed the world, especially in areas like art. Non-fungible tokens have allowed art to go from being exclusive to an elite to being accessible to all kinds of people. Y marketplaces such as APENFT have played an important role in the process.
To celebrate its partnership with APENFT, Poloniex launched a nft giveawayas well as an event where they were sold 1,000 NFTs special edition priced at 999 TRX each. Poloniex will airdrop $25 in futures proof funds for users who purchase an NFT.