The last few weeks have been very challenging for the overall cryptocurrency market. Meme tokens and NFTs which were once very highly valued investments have lost their positions, with several tokens losing more than 10% of their value in the last seven days. This has led many investors to question whether the NFT market is starting to capitulate.
The Meme and NFT Frenzy of 2022
In 2022, the meme and NFT market was a dynamic and volatile space that experienced significant declines as well as record-breaking sales. When it comes to NFTs, the most expensive one sold was The Merge by Pak for $91.8 million on Nifty Gateway in December 2022.
Disaster Girl, a viral image was sold as the most expensive meme NFT sold in 2022. Some of the other NFTs include Nyan Cat for $590,000, Overly Attached Girlfriend for $411,000 and Bad Luck Brian for $36,000.
The gaming genre accounted for over 40% of the total NFT sales volume in 2022. Axie Infinity, Sorare and Decentraland are some of the most successful gaming NFTs to be launched.
The Decline of Meme Tokens and NFTs
Over the last thirty days, only two of the top 10 NFT collections have increased in value, with average returns of 23% (USD) or 16% (ETH). Investors are concerned as many of the major NFT collections have hit new lows.
According to data from Satoshi Club, the daily NFT trading volume across all exchanges decreased by 80% compared to a year ago, hitting its lowest point since 2021. With NFT trading volumes declining, many have also started questioning the action of NFT whales and whether they are trading less. While it’s difficult to tell what the reason is, there is a possibility of whales being cautious in the midst of the recent market downturn.
Additionally, addresses related to NFTs on Ethereum have also reached their lowest levels since 2021. This is a sign that new users are starting to lose interest in NFTs, caused by concerns about the long-term potential of the market due to the recent decline in value.
Many analysts have examined the reason behind this decline. Many believe it is related to the broader market downturn, or the hype and excitement surrounding non-fungible tokens which has caused an oversaturation in the market. Investors are spoilt for choice as there are too many projects and collections fighting for investor attention.
Things Are Looking Up for NFTs Again
While all the signs above point towards the NFT market being in a downturn, there are still some positive signs of growth and progress. There are several positive developments that are sure to change the fortunes of the entire NFT market.
For starters, Star Wars NFTs are expected to be launched on May 24th, which is sure to generate excitement and interest from fans the world over. Another project is gaining significant interest – Pudgy Penguins. The project has raised more than $9 million in funding, which is evidence of significant investor interest in certain NFTs.
Some major companies and organisations have also started exploring the potential of NFTs. For instance, music streaming platform Spotify has started testing NFT-gated features. The success of this project could open up new possibilities for artists and musicians to monetise their creations. On the other hand, Blend, which lets people use NFTs as collateral for lending and borrowing, has also achieved nearly $100 million in loans.
Finally, Elon Musk, who has been known as a backer of cryptocurrencies recently tweeted a Miladys meme causing NFT sales to surge by 500%. There are also rumours that Amazon is launching its own NFT marketplace, which could contribute significantly to the adoption and acceptance of NFTs.
NFTs took the world by storm in 2021, with collectors, musicians, and artists embracing these unique tokens as an opportunity to monetise. Nevertheless, critics say that the NFT’s exorbitant prices and rapid growth are unsustainable and can also harm the broader crypto ecosystem.
While critics of NFTs and meme coins have clarified their stance on why they think they are harmful, proponents of NFTs see them as a natural evolution of the cryptocurrency space. Whatever the case may be, it remains to be seen what role NFTs and meme coins play as the crypto market evolves.
Frequently Asked Questions
What Are Some of the Highest-Valued NFTs to Be Sold?
The Merge by Pak takes the title of being the highest-valued NFT in existence, having fetched $91.8 million on the Nifty Gateway in December 2022. The Merge surpassed the previous record of $69.3 million achieved by Beeple’s Everydays: The First 5000 Days.
What Is the Highest-Valued Meme Token in Existence?
The highest-valued meme token in existence is Dogecoin which has a market cap exceeding $10 billion. It was created as a joke in 2013 as a parody of the Shiba Inu dog meme before gaining popularity and support from the likes of Mark Cuban and Elon Musk.
What Is the Biggest NFT Marketplace in Existence?
OpenSea is the biggest NFT marketplace in existence. As of January 2023, OpenSea was valued at $13.3 million in its latest fundraising round. It experienced a surge in sales in 2022 with a monthly volume of $3.4 billion in August 2022, which is an increase from $96.7 million back in February 2022.
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