The red-hot NFT market is no longer fiery anymore. As per a report, the hype surrounding digital token space has begun to show signs of simmering down as evident from the significant drop of its average trading value. Data from the NFT tracker NonFungible showed that sales of the assets plunged from a record $6,900 at the beginning of the year to a mere $2,000.
On top of that, the current global crisis due to Russia’s invasion of Ukraine has likely added to the decreasing trend. Writer and crypto investor Aaron Brown told in an interview said, “What I would say is the last week or so has seen a significant decline — perhaps as much as 40 percent in floor prices for the most desirable NFTs.”
As per sources, some collectors have resorted to cutting their losses. One such user sold a Bored Ape Yacht Club recently for $224,000 incurring a loss of $67,800 loss.
Another reason many believed that increased scrutiny from US regulators could also be contributing to the overall decline. The Securities and Exchange Commission [SEC] announced this week that it’s investigating whether these asset classes should be deemed as securities and if they needed to be regulated as such.
But all is not over. Even though evidence suggests that the market has started to cool down — the number of unique traders getting into NFTs is still on the rise.
What lays ahead for the NFT ecosystem?
Despite the overall slump, not every NFT marketplace is affected. Bored Ape Yacht Club NFTs saw sales increasing by an impressive 59 percent over the last week, according to NFT data management website DappRadar. CryptoPunks were also up 118 percent. Dapp Radar analyst Pedro Herrera
“Trading volumes are down in general, but the demand measured by the number of unique traders and sales count is increasing. So while we’re seeing less volume, there’s more activity, even though Ukraine’s conflict is definitely driving away from the attention from trading.”
The picture looks hazy with regards to where the NFT market is headed next as in the crypto world, this isn’t any new. Herrera who remains optimistic said that “This, to me, says the space is slowly but surely diversifying and maturing.”