The explosive rise of non-fungible tokens in early 2022 created just as many NFT critics as supporters. You couldn’t browse the internet during their peak without seeing a cartoon monkey. Celebrities often made the news for spending hundreds of thousands of dollars on Bored Ape Yacht Club (BAYC) NFTs. And to this day, the gaming industry is trying to find ways to worm them into video games. However, it seems like the hype has worn off. The daily trade volume on OpenSea, the most popular NFT marketplace, is down 99% from its peak.
OpenSea trade volume woes
At its peak on May 1, 2022, $2.7 worth of NFT transactions occurred on OpenSea, Fortune reports. However, four months later, on Aug 28, only $9.3 million in trades occurred. This recent trade volume dive is partly because of the current crypto winter. The cryptocurrency market as a whole is experiencing a significant downturn. But, this last weekend was particularly brutal.
“We’re playing the long game because we see what’s possible, so we’re not concerned about short-term volatility,” an OpenSea spokesperson told Fortune. “We always expected frothiness, hype, and deflation as the community and use cases evolve, the tech gets more sophisticated, and creators figure out how to build more utility into their projects.”
The current floor price of the Bored Ape Yacht Club collection is about 72 ETH, or around $110,000. It’s the lowest floor price for the world’s most expensive NFT collection since January 2022.
Why are NFTs dying?
As the OpenSea spokesperson mentioned, NFTs are evolving. Projects with little to no utility tend to have short shelf lives unless they obtain massive popularity, like BAYC. As it stands, most collections boil down to digital trading cards that rely on hype and marketing. However, the technology behind non-fungible tokens has greater potential. For example, storing healthcare data on the blockchain as NFTs. It seems like the industry is in a transitional period where tokens without utility are phasing out. Eventually, projects that provide a tangible use case will take over.
