Non-Fungible Tokens (NFTs) took center stage in the year 2021 as artists, influencers, A-list celebrities, and the esports industry finally found a fan engagement tool that allowed the general public to draw take advantage of your success. However, the hype around NFT failed to hold firm as sales fell to one-year lows amid the ruthless 2022 bear market.
The NFT boom, which began in early 2021, maintained its glory until May 2022, supported by a healthy and optimistic crypto ecosystem and positive investor sentiment. However, Bitcoin’s (BTC) struggle to maintain its all-time high prices had an adverse impact on the entire crypto ecosystem.
Number of daily NFT sales between June 2021 and June 2022. Source: NonFungible
The NFT ecosystem posted its worst performance of the year in June 2022, as the total number of daily sales dropped to approximately 19,000 with an estimated value of $13.8 million, a number that was recorded in June 2021.
Last year, however, daily NFT sales of a similar amount were considered impressive, as the nascent ecosystem saw mainstream implementations across various use cases.
Trading volume and market capitalization of NFT. Source: NFTGo
As evidenced by data from nonfungible.com, the NFT ecosystem witnessed its highest number of daily sales of 224,768 NFTs on September 24, 2021, worth $78.3 million. However, the largest sale in dollar value terms took place on May 1, 2022, when 118,577 NFTs were sold in one day for $780.4 million.
Some of the key factors negatively impacting the hype around NFTs are falling Ether (ETH) prices, lack of secondary market demand, and unrealistic gas fees. As a result, in the last three months, NFT’s market capitalization suffered a drop of almost 40% and lost more than 66% of its trading volume, as data from NFTGo shows.
Related: NFT to appear on Facebook, cross post with Instagram as Meta Web3 expansion continues
Amid the bear market, crypto entrepreneurs including Changpeng “CZ” Zhao are helping governments explore NFT use cases in citizen identification. Meta social media giant Facebook also recently announced plans to support NFTs for creators.
A Meta spokesperson revealed that the rollout of NFTs on Facebook would be gradual, beginning with select creators in the United States.