Published on: 16/06/2022
Crypto, NFT markets reach all-time low, recession coming, experts say
The NFT market has been deteriorating this year. Its short boom in 2021 was not a guarantee that it would be able to keep the current slump and declining rate of trade volume at bay. Many have expressed their discontentment toward the industry, while others remain faithful that the market will bounce back.
There are many NFT supporters that are willing to dive heads on and take on their own development projects despite the eerie market condition at hand. The reason behind this is likely related to the potential market return from $3 billion in 2022 to $13.6 billion by 2027, as projected in a report made available by Research and Markets.
The all-time low performance of digital currencies was not surprising, taking into account that the global economic conditions are also declining. Therefore, it is only a matter of time for it to reach the sensitive and speculative assets of digital currencies.
NFT market this year
Experts have deemed this year as the ugly year for NFTs. According to CryptoSlam, NFTs’ weekly trading volume since May this year has been consistently posting below $50 million. The declining number was apparent when the market reached $1 billion in August last week.
The same report also suggests that shortly after the NFT boom in early 2021, the market’s weekly NFT sales surpassed 1 million on a few occasions. However, the same is inapplicable in recent months after NFT sales this week plummeted to less than 150,000 sales.
Both weekly trading volume and weekly NFTs sales are one of the three shortcomings the market has to offer this year. Adding to the pair is the steep decline of floor prices on NFT collections, including notable and big names projects.
For example, Yuga Labs’ iconic project Bored Ape Yacht Club has been struggling to keep its floor prices consistent. BAYC is an NFT collection featuring 10,000 pieces of cartoon apes, and its cheapest NFT in late April this year was valued at $400,000. However, the value dropped to $132,000 on Sunday, as per Yahoo Finance’s Joel Frank.
It was not solely caused by the sensitive and speculative market aspects of NFT, considering that the global economic conditions were struggling when the pandemic strikes.
This set forth quite an alarmingly high rate of inflation in economic powers, including the United States, the United Kingdom, and the Euro Area, which led to major central banks releasing a more tense and rigid monetary policy. These tight financial conditions, as projected by many, pose huge threats to highly sensitive assets.
Adding to the hardships are the concerning Russian invasion of Ukraine, lockdowns, and outbreaks that have shivered the international economic conditions, prompting experts to arrive at a conclusion that it is only a matter of time before a recession takes place.
Companies working to help NFT, digital currencies
Seeing how badly the yet-to-mature industry was affected, companies began their initiative to help the limping market. Meta has prepared NFT-related features on both Facebook and Instagram that will not only allow users to display NFTs as a profile picture but also to mint NFTs on the platforms.
Aside from Meta, Sotheby’s, Shopify, and Gamestop have also launched their own NFT marketplaces, joining OpenSea as the leader.