Is the NFT market dead?

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Author: ARNDXT, crypto researcher; Translated by: 0xxz@ Jinse Finance

Is the NFT market dead?

I’ve been digging into the data surrounding the NFT market crash, and I wanted to share my analysis.

Let’s analyze what happened and why.

The current NFT market is like a ghost town

alAC557NIFe2D42X9quLVgVChj7DV6HDOLcVaRi4.png At the time, BoredApeYC was selling for over 150 ETH.

Now? They barely make it to 11 ETH.

In dollar terms, that’s a 90% drop.

But it’s not just BAYC — the entire NFT market has largely disappeared…

Daily trading volume once reached $100-200 million (and sometimes even $1 billion!), but now hovers around a mere $5 million.

The NFT market is like a ghost town right now.

what happened?

Here are my thoughts:

• Unsustainable use cases: The initial hype around digital art and collectibles was unable to sustain its momentum. While innovative, many projects lacked long-term utility beyond speculation.

• Liquidity crisis: The overall contraction of the crypto market has hit NFTs particularly hard. As capital flows decrease, the illiquid nature of NFTs becomes a major burden.

• Narrative shift: Market attention has shifted away from NFTs. Current trends suggest the market will shift toward memecoins and other narratives.

• Technical limitations: Many NFTs do not store actual content on-chain, but instead rely on URLs or IPFS hashes. This raises concerns about long-term viability and true ownership.

• Market saturation: A large number of low-quality projects and “money-making” behaviors have diluted the market space, making it more difficult for high-quality projects to stand out.

Looking ahead

Despite the current gloomy situation, there are some potential catalysts for recovery:

• Atomic NFTs: By integrating files and metadata on-chain, some key technical criticisms can be addressed.

• Utility-focused projects: NFTs that offer real utility beyond speculation are likely to gain traction.

• Integration with DeFi: NFT collateralized lending or fragmentation can improve liquidity.

• Gaming and Metaverse Applications: These areas can drive more sustainable use cases for NFTs.

I think NFTs are a great idea, but they won’t be sustainable without a lot of innovation around PFP.

Crypto Twitter didn’t help, it reduced everything to JPEG, PFP, and floor prices. It became a game of who can run faster, rather than building something of lasting value.

Some say we have moved from an NFT bull market to a memecoin bull market. Others point out that developments like Atomic NFTs could breathe new life into the space, and even with Pandora_ERC404’s ERC404 NFT standard, it is not new.

It is an existing technology and the hype around ERC404 and its derivatives or other ERC standards has improved slightly since then but cannot be sustained.

However, having said that, I do think that if projects use these new ERC NFT standards, with good support/promotion from the right people, they will eventually be adopted and break through.

If I remember correctly, DINO (@Linea_erc404 on Twitter) was supported by Linea and the Consensys team in this context. But considering the current market, NFTs are not getting much attention. In terms of community strength, it can't do better than Pudgy Penguins or MonkieDAO, which held regional and international events to bring the community together.

I do hope to see the return of NFTs.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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