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Does the Decline in NFT Sales Hint Back to 2018 ICO Bust?

2 mins
Updated by Andrew Rossow
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In Brief

  • The dwindling NFT sales have led to some skeptics to compare it to the ICO bust of 2018.
  • Some NFT collections have been labeled as “dead” because of their failure to record any transactions recently.
  • Analysts have opined that the dropped numbers are only a reflection of the general mood of the world.
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One-third of NFT collections have been considered “dead” due to the minimal amount of transactions, according to crypto analytics firm Nansen.

The firm continued that some of these NFTs have also dropped below their value since launch as they are now trading below their mint price. 

Statistics by NonFungible also highlight the sales volume of NFTs also in decline. At the beginning of February, the number of NFT sales was over 376,000, while less than 100,000 daily sales have been recognized in just the past few days.

Many in the space have attributed the decline to the ongoing conflict between Russia and Ukraine.

Despite the decline, it’s clear the NFT market remains both strong and useful, as it has continued to play a major part in the ongoing geopolitical crisis, with many NFT projects actively raising funds to donate to the Ukraine. A recent report by The Guardian revealed that the Ukrainian government is planning on issuing its collection of NFTs.

This increased number of failed NFT projects reminds analysts of the crypto space about the ICO failure of 2018, where a large number of digital assets lost their value as authorities continued to warn of the dangers associated with unregistered securities – or otherwise, disguised tokens.

While many throughout the NFT space have rejected this assertion, the dwindling numbers in February have shown otherwise with many projects that seem to gain traction solely off hype, but provide little to no utility to the community nor industry.

Madonna’s entrance into the Metaverse

While huge investments like Madonna’s recent announcement of her Bored Apes purchase, data shows that NFT sales are still down. On Thursday, the pop singer shared via Twitter that she had purchased Bored Ape #4988 for a whopping 180 ETH ($560,000) as of press time.

Madonna’s manager, Guy Oseary also represents Yuga Labs, the company behind Bored Ape Yacht Club (BAYC), which was recently valued at $4 billion.

A dwindling NFT market?

Last month, NFT sales volume has dropped by 40 percent, according to the report. OpenSea, according to DappRadar, has witnessed a rapid 67% decline in its trading volume as of February, following an ATH trading volume in January.

A more cursory look at the available data would show that demands for NFTs are dwindling as orders by new investors are low compared to the ones from old investors.

On the other hand, there has been an increase in the total number of NFT buyers compared to last year.

Experienced investors, however, think this drop in sales is not due to the perceived end of NFTs – rather, they feel it’s due to the ongoing political tensions around the world that have taken the focus of the space.

NFTs, undoubtedly, still have a lot of potential in gaming, art, and general commerce. The question is whether the current lull is arguably a stabilization phase for NFTs?

What do you think about this subject? Write to us and tell us!

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.
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