NFTs, which insiders touted as a fun way to explore with crypto last year, attracted a lot of new crypto buyers. But according to Google Trends, interest in NFTs peaked in January before plunging by around 77 per cent in the last five months. It’s a huge setback in the face of thousands of artists’ aspirations and desires. They saw technology as a way to finally benefit from their otherwise infinitely reproducible digital art. Worse, buyers are outnumbered by sellers by a factor of five.
As reported by CryptoSlam, unique buyers in NFTs were higher than unique sellers in February and March. However, since April that trend has flipped. There is also a decline in the number of unique NFT buyers and sellers. Thus a decline in overall transactions.
Enthusiasts bought the NFT in anticipation
Non-fungible tokens (NFTs) and digital land have seen a lot of speculation, with most people buying these assets with the assumption that another buyer would seek to purchase them for a higher price. With a few exceptions, that isn’t happening right now. Twitter founder Jack Dorsey’s first tweet exemplify the logic behind it.
Some of the primary difficulties for investors wishing to enter the cryptocurrency and NFT markets are a lack of clarity, theft, and risks. Last year, NFTs became one of the most talked-about topics in the cryptocurrency world. Their popularity soared in 2021, but sales volumes have fallen this year. It prompts us to wonder if the craze for NFT is fading.
Thefts, fraud and lawsuits at the world’s biggest NFT marketplace
As with any emerging technology, there is a potential for abuse with NFT. Wash trading artificially inflate the value of NFTs. And money laundering through the acquisition of NFTs, these were types of illicit activities in NFTs by Chainalysis.
Moreover, a series of thefts and scams have sullied the environment around NFT. NFT pump, rug pull, dump schemes, plagiarized NFTs , art theft, and phishing are just a few of the latest frauds that have spooked crypto enthusiasts.
According to data tracker CryptoSlam, there are presently more than six sellers for every buyer on the Solana blockchain. May marks the seventh consecutive month in which CryptoSlam’s data show an increase in unique sellers. Overall, demand is decreasing while supply is increasing.
Abyss in the market place
Here, it is easy to understand that unless the work is an earth-shattering masterpiece or has historical value, one-off works might generate massive amounts of talk in the hopes of attracting new customers seeking for a profitable resale. But that excitement is going to fade over time as the latest fad overtakes it. If the sensation fades, you’ll most likely never find a buyer and be stuck with an eye-catching waste of money. People often overlook the fact that high-end items are almost exclusively purchased by the wealthy. They spend their money on status symbols. In reality, buyers are more likely to buy whatever is the cheapest. And that causes sellers to jump from one platform to the next.
A major “if” remains: the NFT market, while shaky, hasn’t completely disappeared like luna. Projects with well-executed artwork, a vibrant online community, a fun game, or established fan bases, such as sports, can weather the storm.