Despite the broader crypto market being bullish in the past few days, the NFT industry has been battered by a sharp decrease in revenue across the board.
According to CryptoSlam, NFTs sales volume dropped by nearly 31% since last month. This has been in complete contrast to the crypto market which regained lost ground from a disastrous 2022.
Although several big developments around NFTs should’ve helped with the sentiment surrounding the asset, being a new asset class, there are still doubts about whether there is actual utility behind the tech.
For now, let’s take a look at the dire situation the NFT industry is in.
It Doesn’t Look Great For NFT Industry
The current data suggests that the industry will struggle in the short to medium-term. In terms of blockchains, Ethereum still leads the market in sales and transactions. Collections-wise, Bored Ape Yacht Club is still the market leader with $38 million worth of sales.
Despite this, the market seems to freefall at the moment. Data from the Forkast 500 NFT Index shows a 4% decline in the past month. Buyers of NFTS also fell by a significant margin since last month, shedding 34% to its current value of 1.3 million. Total transactions have also decreased by 22% to 5.7 million
Nonetheless, there seems to have a trend in the NFT market. The Ethereum blockchain, although still the number one chain to trade and mint NFTs on, has been suffering a significant dip in almost all metrics. Other “minor” blockchains like ImmutableX, Polygon, Solana, and Arbitrum all saw big jumps in transactions.
It should be noted, however, that Polygon is a layer 2 platform built on top of the Ethereum blockchain. The jump in transactions on the L2 might not reflect on the overall metrics of its parent L1 chain.
Crypto total market cap retains peg on the $1.14 trillion level on the daily chart at TradingView.com
How This Would Affect The NFT Sector
This recent development in the NFT market would certainly affect the rate of adoption of non-fungible tokens as both a form of asset and technology. However, the rising metrics of the minor blockchains reveal that investors are diversifying from NFTs minted on the Ethereum blockchain.
For NFT investors, the market could experience pain in the short to medium term. Investors and traders should then diversify in the minor blockchains with rising transactions as this is the place where they’ll get the most out of their money.
-Featured image from Getty Images