NFT has been the buzzword of the blockchain space over the past several months, reaching celebrity status with artists and public figures who were keen to capitalise on the rapidly growing industry. However, the popularity of non-fungible tokens has dropped drastically since May 3rd, when the sale of NFTs reached a peak of $102 million in one day.
According to data produced by Protos, a mere $19.4 million in NFT sales were processed in the past week, with some suggesting that the NFT bubble has finally popped. While digital collectibles make up the majority of sales, representing half of the current market, overall the number of NFTs sold has dropped by almost 90% compared to the peak in May.
In its peak, the NFT boom saw droves of celebrities and artists collaborating with NFT platforms such as OpenSea, NBA Top Shot, and Nifty Gateway, with the sales of NFTs reaching lucrative levels for some individuals.
Perhaps, most famously, it was the sale of Beeple‘s The First 5000 Days that really drew attention from the mainstream. The sale of his NFT at the prestigious art house Christie’s drew global attention in March when his digital collage sold for a staggering $69 million. Since then, high profile figures such as Eminem, Grimes, and even entire sports teams, have created unique NFTs, and made considerable gains from this phenomenon.
While those investing in the market may find the recent revelations concerning, critics of non-fungible tokens are likely to be glad that the boom of NFTs is seemingly coming to an end, the environmental impact of them being a key concern. As the energy required to mint NFTs is considerable, recent competition has seen new NFT platforms emerge built on Tezos that promise to be much more energy efficient than some of the most popular platforms that are built on the Ethereum network.
Issues such as the environmental impact of NFTs and the idea that they are built on speculation, have been factors in this dip in popularity. Whether or not the NFT marketplace will bounce back is yet to be seen, however the recent crypto crackdown and market slump has certainly not helped matters. The proven track record of Bitcoin means that the cryptocurrency could realistically reverse its downward trend, as it has several times before, but unlike Bitcoin, non-fungible tokens have boomed and burst in a relatively short space of time.