Summary
In 2021, NFTs were all the rage.
Today, the case is very different.
NFTs have somewhat faded from mainstream culture, but what lead to this decline?
Lightspring / Shutterstock.com
What made NFTs so popular in the first place, and where are they now?
At this point in time, even cryptocurrencies were still finding their feet.
It would take another seven years for NFTs to hit their heyday.
The Block
The NFT Boom
In 2021, NFT sales started ticking upward.
The market hit its peak when trading volume exceeded $3 billion.
The most popular NFTs are Ethereum-based, and come in the form of ERC-721 tokens.
The Block
At the peak of the NFT industry, almost half a million NFTs were being minted daily.
This doesn’t even include NFTs from other blockchains, such as Cardano.
This may seem quite incredible, but things didn’t stop there.
Just under a year later, in February 2022, another CryptoPunk NFT sold for $24 million.
Other crypto artworks hit even higher price points.
However, this sale involved thousands of collectors, all paying for a fraction of the NFT.
Statista
The creators managed to gather $21 million in the process, leaving investors out of pocket.
Hacks also gave cybercriminals access to valuable NFTs during the industry’s boom.
For instance,almost $19 million in Lympo NFTs were stolenin a hot wallet attack in January 2022.
Even well-established NFT projects and platforms have been hit by phishing attacks, including OpenSea.
A given NFT can amass value through two factors: demand and utility.
However, the majority of highly expensive NFTs have sold at such high price points because of online hype.
Cryptopunks, for example, have no utility at all.
Rather, being one of the first Ethereum-based NFT projects gave the collection notoriety.
This fact always put the NFT industry in a precarious spot.
Going into 2023, things weren’t looking good for NFTs.
This meant that an NFT once worth $1,000 was now only worth $80.
Evidently, things had gone quite sour for the NFT market.
The NFT Industry Today
2023 has shown just how fragile the NFT industry is.
As of October 2023, a daily average of 2,031 NFT sales were taking place.
A year prior, this figure stood at almost 39,000.
A year before that, it stood at 183,755.
One day, NFTs might regain some, if not all of their previous notoriety.
But for now, they remain a niche market with a limited clientele.
