Positive investor sentiment and a bullish crypto ecosystem supported the NFT boom. The crypto ecosystem was negatively affected by Bitcoin’s bear markets.
In the year 2021, nonfungible tokens ( NFT) were the center of attention. A number of celebrities, artists, and influencers finally found a way to engage the public with their work. The hype surrounding NFT was not able to hold its ground, as sales fell to their lowest point in one year during the brutal bear market of 2022.
NFT boom began in early 2021 and continued until May 2022. It was supported by a bullish crypto community and positive investor sentiment. The crypto ecosystem was affected by Bitcoin’s ( Bitcoin) inability to maintain its high prices.
In June 2022, the NFT ecosystem saw its worst performance since June 2021 when the daily average sales dropped to 19,000 and an estimated value $13.8 million. This is a decrease from the June 2021 record.
However, NFT sales per day of an equivalent amount last year were impressive, as the emerging ecosystem saw mainstream implementations in a variety of use cases.
data reveals that the NFT ecosystem saw its highest daily sales of 224 768 NFTs on September 24, 2021. This was worth $78.3 millions. The largest dollar sale was however on May 1, 2022 when 118 577 NFTs were purchased for $780.4 Million.
Falling Ether ( ETH) prices, lack of secondary market demand, and unreasonable gas fees are some of the main factors that have negatively impacted the hype surrounding NFTs. The NFT market capitalization has dropped by nearly 40% over the past three months while losing 66% of its trading volume. This is as evident in data from NFTGo.
Despite the bear market, crypto entrepreneurs like Changpeng Zhao are helping governments to explore NFT use cases for ID-ing citizens. Meta, a social media giant, has also announced plans to support NFTs in creators.
Meta spokeswoman said that NFTs would be gradually introduced to Facebook, starting with select creators from the United States.