The NFT industry has been hit hard by a sharp decrease in revenue despite the crypto market rallying over the past few days.
CryptoSlam reports that NFT sales volume has decreased by about 31% since last month, contrasting the cryptocurrency market’s recovery from a disastrous 2022.
Despite doubts about the real utility of NFTs as a new asset class, there have been many significant developments in this industry that couldn´t increase the NFT sales volume.
Although Ethereum still leading the market in sales and transactions, the latest data indicates that the NFT industry will have a tough time in the near to medium term.
Bored Ape Yacht Club maintains its leadership in collections with sales worth $38 million. However, the Forecast 500 NFT index reveals a 4% decline in the past month, while the number of NFT buyers has plummeted by 34% from its current value of 1.3 million. Total transactions have also dropped by 22% to 5.7 million.
Smaller blockchains, such as ImmutableX, Polygon, Solana, and Arbitrum, have recorded significant transaction growth, while Ethereum remains the primary blockchain for trading and creating NFTs but has witnessed significant declines in various metrics. It’s important to note that Polygon operates as a Layer 2 platform on top of the Ethereum blockchain, so the surge in transactions on L2 may not necessarily indicate the overall metrics of its parent L1 chain.
Despite the recent challenges faced by the NFT industry, there are growing signs of investors diversifying their portfolios away from Ethereum-based NFTs. Although this trend may impact the adoption rate of NFTs in the short to medium term, there are still opportunities for investors to maximize their returns by looking to smaller blockchains with increasing transactions.
It is worth noting that while the NFT market may experience some short-term pain, the crypto total market cap remains steady at $1.14 trillion on the daily chart on TradingView.com. This indicates that the broader crypto market is still resilient and could provide a stable foundation for the NFT market to build upon in the long term. As such, investors should remain optimistic and continue to explore the opportunities presented by the growing NFT industry.