The cryptocurrency market has faced a challenging week, with meme tokens and NFTs taking a significant hit in value. According to Satoshi Club, many tokens have lost 10% or more of their value in just seven days, with the PEPE token dropping by a staggering 44%. This has led some to question whether this is the beginning of an NFT capitulation.
NFTs Take A Beating As Meme Tokens Plummet
Over the last 30 days, only two out of the top 10 NFT collections appreciated, with the average return being 16% in ETH and 23% in dollars (USD). Many collections have hit new lows, causing concern among investors.
Furthermore, According to Satoshi Club, daily NFT trading volumes hit their lowest point since 2021, with volumes across all exchanges dropping by approximately 80% from a year ago. The decline in trading volumes has also raised questions about the behavior of NFT whales – individuals or entities holding significant NFTs – and whether they are trading less. It is unclear whether this is the case, but whales may have become more cautious in their approach to NFTs in light of the recent market downturn.
At the same time, as seen in the chart below, the number of newly created addresses on Ethereum getting NFTs has reached their lowest levels since June 2021. This suggests that new users may be less interested in acquiring NFTs, perhaps due to the recent decline in value or concerns about the market’s long-term potential.
While the exact cause of this decline is unclear, it may be related to the broader market downturn affecting many cryptocurrencies in recent weeks. Additionally, some analysts have suggested that the hype and excitement surrounding NFTs may have led to an oversaturation of the market, with too many projects and collections vying for attention and investment.
Despite A Bearish NFTs Market, Positive Developments Hint At Future Growth
The NFT market may be experiencing a downturn, but there are still signs of progress and growth in the industry. According to Satoshi Club, several positive developments are happening in the NFT space that is worth noting.
Firstly, Star Wars NFTs are set to launch on May 24th, which is expected to generate significant interest and excitement among franchise fans. Additionally, Pudgy Penguins recently raised $9 million in funding, demonstrating that there is still significant investor interest in certain NFT projects.
There are also signs of major companies and platforms exploring the potential of NFTs. For example, Spotify is testing NFT-gated features, which could open up new opportunities for musicians and artists to monetize their work. Meanwhile, Blend has reached nearly $100 million in loans, indicating a growing interest in using NFTs as collateral for lending and borrowing.
Even Elon Musk has gotten in on the NFT craze, tweeting a Miladys meme that caused sales to spike by 500%. And rumors persist about Amazon launching its own NFT marketplace, which could further drive adoption and mainstream acceptance of the technology.
These positive developments are a reminder that the NFT market is still in its early stages, and there is likely to be significant growth and innovation in the coming years.
Featured image from Unsplash, chart from TradingView.com