NFT Recession: 95% of Assets Drop to Zero Market Value, Report

The once-thriving NFT market is struggling to generate billions like it did in 2021.

Robot showing the red chart of NFT's.
Created by Kornelija Poderskytė from DailyCoin
  • The NFT market has hit a recession. 
  • A recent report reveals harrowing details about the NFT market’s decline since 2021.
  • Despite a significant slowdown in market growth, a glimmer of hope remains. 

In 2021, NFTs stormed into the crypto industry like a hurricane, transforming into a goldmine for almost everyone who touched it. Minting overnight millionaires with what many called ‘on-chain jpegs,’ the speculative frenzy led most to anticipate the asset class exploding much like memecoins today, resulting in its market swelling to billions– but not for long. 

After weathering a tumultuous two-year bear market and with the dust settled, a sobering realization emerges: people are losing interest in NFTs. 

NFT Market Hits Recession

Today’s NFT market starkly contrasts with the feverish frenzy in 2021, as investors and traders now exit the once-booming ecosystem amidst declining sales and waning interest. In a report shared with DailyCoin, Invezz reveals that while the global market cap of NFTs has soared past $190 billion, the industry is traversing a harrowing path. 

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After analyzing over 73,000 NFT collections with a combined trading volume of $17 billion, the report reveals a staggering reality: 95% of all NFT projects, totaling over 69,000 collections, held zero market value at press time. 

The decline can be attributed to the NFT market’s dwindling trading volume, which has plummeted 97% since its peak in 2021. Adding to the gloom, the once-thriving market, renowned for generating millions per sale through collections like CryptoPunk and Bored Ape Yacht Club, now struggles to generate even hundreds. 

According to the report, 53.6% of NFT sales were valued at less than $200, while 75% were worth less than $100. The daily number of sales also paints a similarly bleak picture, nosediving from an average of 87,000 in 2021 to around 2000 in 2024. 

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Offering a sobering perspective, the market recorded only $11.6 million in sales in Q1 2024, a far cry from the industry’s erstwhile billion-dollar hauls per quarter in 2021. It’s evident that one of the crypto industry’s most lucrative and celebrated sectors now faces a pronounced recession; however, there remains a glimmer of hope for a potential comeback. 

There’s Hope for the NFT Market

The crypto market has been through the wringer, emerging from an enduring bear market worsened by international conflicts and contagion events like the FTX fiasco. Lingering scars from the past two years have yet to heal. 

While the industry has garnered significant favor and attention from institutions, leading to its historic run earlier this year, global macroeconomic and geopolitical uncertainties continue to cast a shadow over investor confidence. 

Many find themselves on the edge of their seats, analyzing each candle, anxiously awaiting the official start of the bull market signaled by the US’ first rate cut in two years

While some investors have already plunged into memecoins, reaping astronomical gains amidst the frenzy, the NFT market lies dormant, poised for resurgence once market conditions stabilize.

NFTs are inherently speculative and entail considerable risk. Given the market’s tumultuous performance over the past two years, it’s not an appealing investment choice. However, the market could regain its lost valor once retail investors reenter the fray and reallocate funds from low-risk to high-risk assets. 

On the Flipside

  • Nascent, overhyped sectors like the NFT industry always face a sharp correction before they resurge. 
  • While US regulators intensify their campaign against the crypto industry, the NFT industry remains immune to ambiguity. Stakeholders argue that NFT-specific legislation could hinder its growth. 

Why This Matters

The NFT industry is one of the greatest subsectors of the crypto sphere. Its slow decline amidst waning interest and sales is concerning, especially for those who hold NFTs.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Insha Zia

Insha Zia is a senior journalist at DailyCoin covering crypto developments, especially in the Cardano ecosystem. With a Bachelor of Science in Computer Systems Engineering, he delivers high-quality articles with his technical background and expertise in data analysis and programming languages, aiming to educate and inform readers accurately, transparently, and engagingly. Insha believes education can drive mass adoption of the crypto space, and he is committed to giving DailyCoin readers a better understanding of the technology.