Sales of NFTs plunged significantly in the third quarter of 2022 as investors kept clear of risk assets amid a challenging macroeconomic environment. NFT sales stood at $3.4 billion in Q3, down from $8.4 billion in Q2. Compared to Q3 2021, NFT sales in Q3 2022 are down 68.2%.
Crypto Winter and Tough Macroeconomic Conditions Send NFT Sales Down 60% in Q3
The non-fungible token (NFT) market crunch continued in the third quarter as sales sharply plummeted to $3.4 billion from $8.4 billion in the earlier quarter, according to blockchain tracker DappRadar. The nearly 60% drop comes as investors continued avoiding risk assets, which have been battered in recent months.
Year-over-year, NFT sales are down almost 70% from $10.7 billion in Q3 2021. Sales reached a peak of $12.6 billion in January, marking a 73% decrease in just 10 months.
The latest quarterly report represents a sharp U-turn from 2021 when strong crypto performance encouraged investors to try and cash in on booming NFT prices. The NFT market saw inflows of $44.2 billion in 2021.
The steep drop comes as investors rotate away from crypto and other riskier investments amid record-high inflation and aggressive interest rate hikes by global central banks. The world’s largest cryptocurrency, Bitcoin, continues trading below the $20,000 mark, down over 50% in the past six months.
Earlier this year, investors lost more than $800,000 in NFT investments after an NFT marketplace SudoRare disappeared with users’ funds. The project deleted all of its social media accounts after the so-called ‘rug-pull’.
OpenSea Sales Down For a Fifth Consecutive Month in September
The NFT market crunch sent sales on the largest NFT marketplace, OpenSea, down for a fifth straight month in September. OpenSea CEO Devin Finzer thinks the current NFT environment represents an “intersection of both the macroeconomic downturn and the crypto winter.”
“The previous crypto winters were a little more isolated to just crypto prices so for that reason, I think it’s wise to be conservative about how long this could last.”
– Devin Finzer, CEO of OpenSea
However, Finzer was more optimistic when it comes to OpenSea’s long-term prospects, saying the company is sitting in a “good spot financially.” Finzer believes the market will rebound going forward and views the ongoing slump as a “building phase.”
Earlier DappRadar report showed that OpenSea processed just $9.34 million in NFT transactions on August 28, compared to the May 1 peak of $2.7 billion. The number of OpenSea users also fell significantly last month to roughly 22,000, from almost 60,000 in January 2022.
This article originally appeared on The Tokenist
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