Sales of non-fungible tokens hit an all-time high in January as the assets gained popularity among crypto investors, mainstream consumers and even celebrities. But as 2022 draws to a close, that’s a whole different story.
Global monthly NFT sales fell 89% in November from their all-time high of over $4.9 billion in January, according to blockchain data tracker CryptoSlam. The decline threatens marketplaces, including those launched by GameStop and Coinbase Global, which sell the once white-hot digital assets. It also reflects a broader crypto rout accentuated by the implosion of hedge fund Three Arrows Capital, the bankruptcy of crypto lender Celsius, and the dramatic fall of digital asset exchange FTX.
“Confidence has been shaken dramatically,” said Ian McMilan, chief growth officer of Mojito, a software startup that helps consumer brands build NFT platforms.
While GameStop’s NFT marketplace saw record daily volume of more than $2.1 million on July 12, sales have been tough since the video game retailer launched the platform five months ago. according to data provided by DappRadar. The blockchain analytics firm, which has tracked GameStop NFT blockchain transactions on the Loopring protocol, reported just over $4,820 in transactions on October 30, the day before GameStop began selling NFTs based on the ImmutableX protocol.
It’s unclear how the platform currently operates since DappRadar stopped reporting GameStop NFT sales on November 9. A DappRadar spokesperson said the company and GameStop decided to disable tracking because without the ImmutableX volume the data would be misleading, but the company hopes to resume tracking “for the foreseeable future.”
Meanwhile, GameStop ended its two-month pilot partnership with FTX US selling the crypto exchange’s gift cards on November 11, the same day FTX filed for bankruptcy, according to a report. Tweeter, which said it will “provide full refunds to affected customers.” GameStop did not respond to a request for additional comment.
The NFT Marketplace for FTX US, the US subsidiary of FTX, directs visitors to the crypto exchange’s bankruptcy proceedings. NFTs created or “minted” using the platform also link to the same bankruptcy webpage or display an error message when viewed on other NFT marketplaces such as Magic Eden.
The decline in interest in NFTs is also hitting Coinbase’s platform, which got off to a slow start when it launched in May. Trading volume has fallen significantly since the market’s all-time best selling day in September, according to blockchain tracker Dune Analytics. While Coinbase NFT saw over $533,500 in sales on September 9, it saw just over $5,000 in volume on December 26, a decline of 99%.
The platform has recorded a sales volume of $7.2 million since its launch, according to Dune Analytics. That’s less than the $8.2 million OpenSea — the No. 1 NFT marketplace based on trading volume — recorded in the past 24 hours alone, according to DappRadar. But even OpenSea has seen its sales hold steady at $186 million over the past 30 days.
Asked what Coinbase NFT is doing to drive sales, Max Branzburg, head of consumer products group at Coinbase, said in a statement that the company has revamped its Drops program for NFT launches and added a way for NFT collectors. to avoid paying high fees. blockchain network congestion.
“In the third quarter of this year, over 92% of our Drops on Coinbase NFT sold out within 24 hours,” he said.
But with new scandals besieging the industry, a revival of NFTs may be harder to come by, according to Catherine Flick, a reader at De Montfort University in Britain who studies the ethical implications of NFTs.
“Now that we’ve seen multiple crypto crashes, the pure monetary value of NFT is no longer a selling point – most people have lost money on it,” she said in an email to Bloomberg.
Mojito, which has worked with brands such as Sotheby’s and the Milwaukee Bucks professional basketball team to develop NFT offerings, has seen some of its clients pull out of assets during the market downturn, especially if they’re used for novelty marketing campaigns, according to McMilan. He said other companies are still interested in using NFTs for the long term, especially if they’re paired with more traditional products like physical goods.
“People just want to sit back and wait a bit and let the storm pass,” he said.