Trading Volume for NFTs Plunges to US$11.8 Billion in 2023, Reflecting a Sharp Decline from Previous Year’s Figure
According to a report by CoinGecko, the trading volume for non-fungible tokens (NFTs) dropped significantly to US$11.8 billion in 2023, compared to the previous year’s figure of US$26.3 billion. This significant decrease has raised concerns and prompted comparisons to the Dutch “tulip mania” of the 1630s, where the price of tulip bulbs skyrocketed before crashing.
NFT Market Suffers as 69,795 Collections Have Zero Market Cap
A report from dappGambl revealed that out of the 73,257 NFT collections analyzed, an overwhelming majority of 69,795 have a market cap of 0 Ether (ETH). This highlights the downward trend in NFT prices and the challenges faced by the market.
Celebrities Facing Legal Action for Alleged Role in NFT Craze
As the prices of NFTs crashed, celebrities such as Justin Bieber, Madonna, Paris Hilton, and Jimmy Fallon found themselves facing a class-action lawsuit. Investors claimed that they were misled into purchasing NFT collectibles by these celebrities, who were seen as promoters of the craze.
Factors Behind NFT Price Drop and Possible Resurgence
Various factors contributed to the fall in NFT prices, including the crash of cryptocurrencies used for NFT transactions and the cooling down of initial enthusiasm. However, recent reports have indicated potential signs of recovery, with businesses and brands experimenting with NFTs as digital collectibles.
NFTs Still Offer Value, Despite Decreased Prices
Despite the decline in prices, analysts and industry players are optimistic about the future of NFTs. While prices may not reach the record highs of previous years, tokens that have survived the bear market and are backed by active teams could still appreciate in value. Additionally, a reduction in speculative activities could bring stability to the market in the long run.
NFT Technology Extends Beyond Trading, Focusing on Digital Art Space
Beyond trading, the underlying technology of NFTs has a wider range of applications, particularly in the digital art space. The unique features of NFTs make them ideal for artists to authenticate and sell their digital creations. This opens up opportunities for artists to explore new revenue streams and expand their reach to international markets.
Traders Facing Losses Navigate Challenging NFT Market Landscape
Traders and investors in NFTs have experienced significant losses amidst the market downturn. Some have suffered actual losses while others are holding on to depreciated assets. The departure of a noticeable number of participants from the market indicates the impact of the bear market on traders. However, industry players believe that the market purge has eliminated bad projects and speculators, paving the way for a more stable and promising future for NFTs.
Analyst comment
Positive news: NFT technology has a wider range of applications in the digital art space, offering opportunities for artists to authenticate and sell their creations, expanding their reach and revenue streams.
Negative news: Trading volume for NFTs dropped significantly in 2023, along with a sharp decline in NFT prices. Celebrities face legal action for alleged role in misleading investors.
Neutral news: Factors behind NFT price drop include cryptocurrency crash and cooling enthusiasm. Some analysts believe tokens backed by active teams could still appreciate in value. Traders have experienced losses, but market purge may lead to a more stable future.
