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NFT market to recover from current crypto crash

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While global sales of non-fungible token (NFTs) have declined amid the crypto-currency fall, 2022 will likely still see a steady growth rate of 239% compared to last year.

This is according to the NFT Marketplace Update research report compiled by NFT gaming platform Balthazar.

The report notes this year will end with an estimated $48.43 billion in total sales in the NFT market, as the crypto-based trend continues to revolutionise the ownership of digital assets across multiple sectors.

An NFT is a secure digital file which validates ownership, and is stored on the blockchain system, where each NFT can represent a unique digital item, and thus is not interchangeable.

NFTs have become hugely popular across the globe in recent years, with expensive items such as real estate, digital artwork and music being ‘tokenised’ and sold online at exorbitant prices.

While NFTs have proven to be big business in art, entertainment and gaming, several other industries − such as finance, healthcare and real estate − are dabbling in the new technology as they identify valuable use cases for digital creations, to deliver revenue improvements.

The NFT market has in recent days suffered the brunt of the ongoing crypto crash, with sales dropping by 150%, according to the CryptoSlam NFT tracker.

However, John Stefanidis, co-founder and CEO of Balthazar, says despite the bear market impacting the NFT space, the market is expected to show signs of steady recovery.

“We’re seeing a softening of NFT sales volume this year, and this is the case across the crypto market. However, if we look at NFT sales volume last year, 2022 has already surpassed this by almost $10 billion, with $23.82 billion in sales this year across only four major marketplaces.

"Weekly sales volumes are showing a downward trend and the average transaction size has dropped. However, there are positive signs that will strengthen the NFT market, as more people are getting involved, which is spurring more activity. The number of users and number of trades have seen positive growth month-on-month from January to May this year.”

The NFT gaming space, in particular, is moving forward with more games being developed, and more investment activity from NFT holders and gamers, he adds.

Crypto-currency’s volatile nature has seen Bitcoin boom and crash several times over the past few years. Its latest decline took place this month, with Bitcoin falling below $20 000 on 18 June − the first time since December 2020, says the Economic Times.

The Balthazar research is based on analysis of four major NFT marketplaces: OpenSea, Magic Eden, LooksRare and Solanart, including other available market data.

“OpenSea is expected to reach $30.61 billion in sales volume by the end of 2022, which is a 134% increase on 2021 ($13.06 billion). Magic Eden is expected to end the year with $6.68 billion in sales – 1 035% increase on last year,” notes the report.

As to monthly trade volumes, from 1 June to date, sales are sitting at $673.31 million in volume across the four marketplaces, notes the report. This is 80% lower than May 2022 ($3.40 billion).

Weekly trade volumes have slowed in June 2022, with the latest week commencing 12 June down 30% on the previous week. It ended with $195.85 million in sales across the four marketplaces, notes the report.

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11 Aug
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