- NFTs are digital collectables that include art, games, music, etc.
- The global crypto market has witnessed a slowdown in 2022 due to several macroeconomic factors.
- Sales of NFTs noted a sharp decline in the third quarter.
The history of volatility in the crypto market proves it is not a once-in-a-blue-moon event. It is hard or impossible to predict the future performance of the overall crypto market.
The crypto market last year gained immense popularity, with several major cryptos like Bitcoin touching their all-time highs. However, given the global economic downturn and geopolitical turmoil this year dampening the broader financial market, the crypto market also witnessed a slowdown in recent days.
Meanwhile, the increasing popularity of cryptos also triggered several other trends like non-fungible tokens or NFTs, metaverse, Web3, etc.
Let us have a closer look at what it is NFT explore the recent performance of the overall NFT market:
What is NFT?
As many of you already know, NFT stands for non-fungible tokens, primarily built through cryptos' same kind of programming. In other words, the NFTs are based on blockchain technology, which cannot be traded or exchanged like other cryptographic assets.
It is a digital asset representing different types of collectables, including art, music, games, etc., with authentic certification. Some examples of NFTs include images or any digital collectables, domain names, games, sneakers, or other fashion items.
By creating digital content as NFT, creators enjoy the profit through publishing it on platforms where NFTs are traded. Many NFT exchanges operate just like crypto exchanges. Like OpenSea is an example of an NFT exchange.
Is the NFT market experiencing a slump?
Sales of NFTs noted a sharp decline in the latest quarter, as investors, as well as crypto market enthusiasts, traded on a cautious note amid a slump in the global market.
According to DappRadar, the sales of NFT in Q3 2022 were US$ 3.4 billion, down from US$ 8.4 billion in the second quarter. NFT sales saw their peak of US$ 12.5 billion in the starting quarter of the current fiscal, DappRadar added.
The NFT market witnessed gains in 2021 when investors bet on digital currencies hoping for higher returns, evidenced by the price jump. However, investors have shifted to the sideline with rising prices, the central bank's rate hikes, and harsh regulations on digital currencies.
In addition to that, sales on OpenSea declined for the fifth straight month through September, the company said.
Another report from Dune Analytics showed that the NFT market dropped from its peak of US$ 17 billion in early 2022 to around US$ 470 million in the last month, signifying a decrease of about 97 per cent.
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The risks and volatility are higher in digital assets and as mentioned earlier. So, it is impossible to predict the market's future performance. But given the recent conditions and analyzing the reports, the NFT market appears to be witnessing a slowdown.
The overall crypto market is also no exception amid the gloomy sentiment in the broader market. But several analysts still anticipate that the market will rebound from the sharp declines it is witnessing in recent days.
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