In early 2021, NFTs were pitched as a way for artists to make life-changing money. All you needed was a token! So artists raced out to buy ether so they could mint NFTs of their work. Only, the money didn’t pour in—unless your name was Beeple.
Now all that is left of the once overly hyped NFT market is dust in the wind. NFTs are becoming an unattractive piece of history. People aren’t trading them, and the only ones talking about them are those trying to sell them.
Since the beginning of this year, monthly transaction volume on OpenSea, the most popular NFT marketplace, has fallen by 90 percent. In August, the monthly transaction volume on OpenSea was $500 million, compared to $4.8 billion in January, according to the Dune Analytics dashboard.
The biggest indication that the hype was dissipating came in July when OpenSea announced it was laying off 20 percent of its staff. (They didn’t say how many people that was in total, but following the event, OpenSea had only 230 employees left.)
Those layoffs coincided with a plunge in the wider crypto markets. Bitcoin has lost 57 percent of its value since January, falling to $20,000. Ether, the second most popular crypto, has plummeted 58 percent, to $1,500, over the same timeframe. And several large crypto lending firms have filed for bankruptcy.
With inflation rattling the stock market, the last thing retailers want to invest in right now are illiquid NFTs. By their very nature, NFTs are difficult to sell. Whereas one bitcoin is as good as any other, you have to find a special buyer for your NFT—and if the special buyer doesn’t come along, you could be stuck holding your NFT for a long time.
Another noticeable sign that the NFT markets have cooled is that the floor price for popular NFT projects is falling. The minimum anyone is willing to bid for a Bored Ape Yacht Club NFT is currently 78 ETH ($117,000), according to CoinGecko. At its height this year, on April 30, the floor price for a BAYC NFT was 153 ETH ($530,000).