According to crypto analytics firm Chainalysis, the crypto market's bloodbath has contributed to sales in the non-fungible token (NFT) sector falling to a 12-month low.
In June, NFT sales surpassed $1 billion for the first time since June 2021, when they totaled $648 million.
When sales reached an all-time high (ATH) of $12.6 billion in January of this year, NFTs were the talk of the town, but a slow start is expected in the second half of 2022.
Chainalysis economist Ethan McMahon pointed out:
“This decline is definitely linked to the broader slowdown in crypto markets.”
Tightened macroeconomic conditions have not been kind to the cryptocurrency market, which has seen its value plummet to less than $1 trillion from around $3 trillion in November of last year.
For example, the US Federal Reserve recently raised interest rates by 75 basis points (bps), the largest increase in 28 years.
As a result, McMahon believes that consolidation in the crypto sector, including NFTs, will continue. He mentioned:
“Times like this inevitably lead to consolidation within the affected markets, and for NFTs we will likely see a pullback in terms of the collections and types of NFTs that reach prominence.”
Despite the fact that NFT sales have exceeded $42 billion so far in 2022, their importance has been harmed by a number of problems that have consumed the crypto market.
For example, the demise of LUNA and Terraform Labs' algorithmic UST stablecoin sent shockwaves through the crypto market.
Things began to turn sour in May, when the price of UST plummeted to the point where top crypto exchange Binance, along with LUNA, briefly banned withdrawals.
Since NFT Google searches overtook those of Ethereum and crypto in January, it remains to be seen how this industry develops in the next months.
As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!
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