Plunging NFT Sales Herald New Direction for Tokenized Artwork

Updated by Ryan James
In Brief
  • Key metrics suggest that NFT sales are in a steady decline.
  • Some commentators believe NFTs are going through a period of consolidation.
  • An executive at Christie's auction house believes that the new breed of NFT buyers are less interested in speculation and are becoming more discerning buyers of art.
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The NFT market has been swept up in the crossfire of a broad selloff in Ethereum as the mania of 2021 plateaus. But a new brand of collectors is emerging.

Key indicators suggest that the appetite for exorbitant spending on certain cartoon apes and kitties is abating as both sales and floor prices of NFTs dip. Sales on OpenSea have dipped from roughly $2.6 billion at the beginning of May to $671 million on June 1, while the floor prices of Bored Ape Yacht Club and Otherside NFTs, both from Yuga Labs, have dropped by 30% and 33% respectively in the last 30 days, according to NFT Price Floor.

The JPG NFT Index, which tracks so-called blue-chip NFT projects, is also down 70% since it launched in April.

Recent touchstone events like the NFT.NYC conference and the Bored Apes ApeFest 2022 in New York seem at face value not to have done much to rekindle investors’ enthusiasm. Nor has E-bay’s purchase of KnownOrigin, an NFT marketplace, seem to have stoked interest.

NFTs are going through a period of consolidation, says Aaron Brown, a writer for Bloomberg Opinion. He says they will survive, albeit on a more sensible footing than the frenzy that occurred in 2021.

Different breed of NFT collectors emerging

It certainly does seem that a different breed of NFT collectors has emerged.

While sales of NFTs belonging to famous collections have had a rough month, hope is brewing in a smaller alcove of the NFT space: museum sales of tokenized digital art.

While the sale of a $69.3 million digital artwork by digital artist Mike Winkelmann has yet to be equaled, the appetite for tokenized artwork remains healthy. Prominent artists showcased their work at a Christie’s auction for charity on Tuesday. A collection entitled “Cartography of the Mind,” comprising 27 pieces, sold for $1.6 million, reports the Wall Street Journal.

Initial sales estimates for the collection were around $1.5 million. Lower initial sales estimates could indicate that the market is setting a new baseline for tokenized art, as artists like Winkelmann experience the realities of a crypto bear market for the first time. Collectors are also becoming more discerning, according to Nicole Sales, business director of digital art at Christie’s. The days of speculation are over, she suggests. Now it’s about real art.

Winkelmann’s latest offering, “Pilgrimage,” slightly exceeded its initial estimated selling price of $250 000 at the auction, a far cry from the furor surrounding his seminal “Everydays: The First 5000 Days,” which sold for $69.3 million.

Ether selloff contributing to lower sales

Christie’s said it is still open to accepting crypto for NFT purchases, which have only reached $4.6 million this year, compared to last year’s $150 million. A significant selloff in Ether, the primary currency used to purchase NFTs, may also be contributing to the lower revenues.

Sales is hopeful about the long-term outlook, saying that the line to get into the NFT.NYC conference last week spanned more than a city block.

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