NFT‘s sales volume in July decreased by 25% compared with that in June

[TL;DR

---

The general sales of NFT dropped by 25% in the July report. The reason for this decline can be tied to several factors. One of these reasons is the decline in the crypto market.There also seems to be a disinterest in NFT projects. This could be due to the “overhype” of former projects. Currently, the prices of crypto assets are down, and NFT projects are correlating with this. There is hope in the market that the performance of NFTs may improve after the Merge.

CryptoSlam data shows that non-fungible token (NFT) sales fell 25% in July. This is the second month it will be below 1 billion dollars, thus reflecting broader crypto market weakness.

In an interview with Forkast, Anndy Lian, blockchain author, entrepreneur, and founder of the NFT creator studio Influxo said the crypto market is in a bear market, and its reaction to [NFT] sales is reflected very much in the sales.

World Stock Market

CryptoSlam's NFT relations strategist Yehudah Petscher also believes the market has yet to bottom out. According to an interview he had at Forkast, he stressed that he doesn't know if the bottom will be found this year. He also mentioned that there is a possibility that this bear market could last for several years.

Despite a rough situation, Petscher believes NFTs are still in a very good place as far as growth or transaction volume goes.

The reason for the decline in NFT trading volume

In subsequent months, NFT projects have struggled to sell in the market because of the bearish trend that deepened in the second week of May.

It is also reported that the NFT market has lost some initial hype since it was built on a foundation of nothingness. There is no longer an appetite for investors to spend millions of dollars on worthless JPEGs (as some critics call it)

A 'greater fool theory' may be implied in the NFT concept. Among them is Sina Estavi, who purchased Jack Dorsey's first tweet in March 2021 for 2.9 million. He attempted to sell the NFT in April 2022 for $48 million, but the bid he received was barely $300.

According to the Co-founder/CEO of Hashgreed, Efosa Ighodaro, the decline in NFT sales volume can be tied to the bearish trend of the crypto market. This commemorates that most NFTs are based on the Ethereum blockchain, and thus, the plunge in the price of Ether will result in a fall in the market value of NFTs. He also adds that theft and insider trading have negatively affected the NFT market.

The current state of events

---

Despite expectations that NFTs and the Crypto market would be inversely correlated during the NFT boom of late 2021 and early 2022, these markets now seem to be largely correlated. As a result, NFTs would have been less appealing to investors when their crypto counterparts are increasing in their U.S. dollar value.

However, according to Petscher, it seems as though the two markets are now working together. When NFTs are down, then crypto is down. He explained that he is oblivious of the reason for this correlation as it is a deviation from the initial thought pattern for the two forms of digital assets.

Petscher said that rather than falling crypto values causing NFT prices to rise to compensate, the overall negative market conditions are driving prices down.

Hope for a future rise

---

Due to the upcoming transition of the Ethereum blockchain to a proof-of-stake (PoS) network, the "Merge" for Ethereum could also give the NFT market a boost.

As a result of the switch to PoS, the Ethereum network will be able to use up to 99% less energy, blunting criticisms of its environmental impact.

Despite Lian's warning that transaction fees - another common criticism of Ethereum - will likely remain high, he believes the Merge will create another spur of hype among Ethereum fans.

Conclusion

---

The current decline in the NFT market is not a predicted phenomenon and could be tied to several reasons. Expert opinions say that this decline may go on for several years. However, it depends on the market's reaction to the Ethereum merge.



Author: Gate.io Observer: M. Olatunji
Disclaimer:
* This article represents only the views of the observers and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.