NFT, the once notable innovation of 2021, is down by 98% as its trading volume dropped significantly from around $642 million in April 2022 to slightly over $12.5 million by the end of the 2022 Q3, according to CryptoSlam NFT Global Sales Volume Index.
NFTs gained popularity in 2021 and remained well into 2022, with people trading JPEGs valued at millions of dollars. Many people worldwide were actively trying to make quick money on anyone eager to cash in on the frenzy. Thousands of celebrities and VIPs hopped on board, pushing NFT projects that eventually turned out to be scam projects to their followers.
On OpenSea, NFT trading volume peaked in May 2022 at slightly over $2.7 billion. Still, in September 2022, it averaged under $10 million for the whole month and only once exceeded $10 million on just two occasions. This is a 99% decline in trading volume from its peak in May. Additionally, the values of popular NFTs projects are rapidly falling, suggesting that the era of NFTs may soon be coming to an end.
While many people think this is merely a phase like other bear markets, this may not be the case given that the daily trading volume of Bitcoin is between $20 to $50 billion at its peak despite a decline in its value from over $68,000 all-time high to slightly over $19,000.
The 98% drop in NFT trading volume is not surprising as the asset constantly struggles to find a use case and the high gas fees associated with trading these assets, particularly on the Ethereum network. As a result, some of the most popular NFT games, such as The Sandbox and Axie Infinity, are rapidly dying.
While it is difficult to predict whether this will continue for a long time or whether it will recover, the future of NFT trading and ownership does not look promising because it is yet to find a specific use case. The outrageously high transaction cost prevents people from using NFT assets for simple project-based memberships and tickets.
