NFT trading volume reportedly dropped by 97% since January

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Yahoo Finance Live reports on the sharp decline in NFT trad­ing since the begin­ning of 2022.

Video Transcript

RACHELLE AKUFFO: Trad­ing in NFTs or non-fun­gi­ble tokens has col­lapsed. Now since its peak at the start of 2022, vol­ume has slid from $17 bil­lion in Jan­u­ary to about $470 mil­lion in Sep­tem­ber. That’s accord­ing to data from June Ana­lyt­ics. Now that’s also a drop of 97%. Now we all remem­ber when we saw all this hype sur­round­ing NFTs, it seemed like every artist, every ath­lete was com­ing out with their own NFTs.

But you had a num­ber of issues. We saw that falling along with what we saw with falling cryp­to prices, but more impor­tant­ly, a real lack when it came to sec­ondary mar­ket demand. You buy the thing, and then what? Who is actu­al­ly going to buy it from you for these incred­i­ble prices that peo­ple were pay­ing, Seana? So I mean, this– I feel like this was inevitable.

SEANA SMITH: Yeah, I nev­er got on board with it. I nev­er under­stood why peo­ple were pay­ing tens of mil­lions of dol­lars for a pic­ture of a goril­la or some­thing like that, some­thing that they don’t actu­al­ly own the phys­i­cal pic­ture of. It did­n’t make a lot of sense to me. The fact that we’ve seen such a drop in the NFT mar­ket, I think, makes a lot of sense.

Tak­ing a look at some of the Google search trends that we have seen, com­par­ing to what we saw back at the begin­ning of the year, so it’s actu­al­ly down. The Google search trends for buy NFT and sell NFT are off just over 90%, com­pared to what they were in Jan­u­ary, when those prices were way too high. Dave, we need­ed a cor­rec­tion in the mar­ket. I think a lot of the big play­ers in the NFT mar­ket say that same thing. They need to work out some of that froth in order to actu­al­ly grow and build a mar­ket that’s going to be here for the long run.

DAVE BRIGGS: Yeah, I talked to Gary Vayn­er­chuk about that ser­i­al entre­pre­neur who was real­ly in this space ear­ly on. And he likened it to what you just said. It real­ly need­ed to go through this to get rid of some of these frauds, some of these pre­tenders. I’m para­phras­ing what he’s say­ing. But he pre­dict­ed this a year ahead of what we’re see­ing now.

Now, there’s an inter­est­ing term that’s devel­op­ing. You talk about some­thing that is phys­i­cal, but now the term is phy­gi­tal. So maybe phy­gi­tal NFTs are the future, which gives you a phys­i­cal com­po­nent of an NFT. Or I think the oth­er thing that can save NFTs is a prac­ti­cal appli­ca­tion, in par­tic­u­lar, in the sports and con­cert space. Can an NFT act as a tick­et in the future as both a col­lectible and a way to enter these venues? That, I think, might give us some rebound here.

But look, anoth­er prob­lem for this, Rachelle, has been their pur­chase main­ly with Ether. Ether is down 65% year to date and nev­er got that bounce from the merge that we all pre­dict­ed. It’s even down in the last month. So a lot of prob­lems to go into in the NFT space, and not a lot of optimism.

RACHELLE AKUFFO: No, I agree. I mean, a lot of peo­ple thought Ether was going to go up after the merg­er, but I think they for­got that this was a tech­ni­cal upgrade. This was­n’t actu­al­ly going to affect the price of Ether. But when you real­ly don’t edu­cate your­self on some of these things, these are the kind of things that you fall into.

And then when you also look at the util­i­ty fac­tor, which I think is inter­est­ing that you men­tioned, once you attach to some­thing like a play­er expe­ri­ence or some­thing else, then you’re real­ly adding some sort of tan­gi­ble val­ue. But an image that some­one could just take a pic­ture of and send else­where, I think they were on that los­ing end. But maybe some, once this froth clears away. The ones that have util­i­ty, I think, will be the last ones standing.

DAVE BRIGGS: Yeah, like that Tom Brady, Seana. Now the Tom Brady expe­ri­ence, the oppor­tu­ni­ty to meet TB? That, I think, peo­ple would invest in. And that’s what Auto­graph is up to.

SEANA SMITH: Yeah, you need that real life appli­ca­tion, I agree with you, in order for this to take off. I think too many peo­ple are strug­gling to real­ly wrap their heads around the whole NFT space. As it is right now, I am one of those people.

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