Plunging floor prices and sales volumes indicate "the NFT market is dead," experts say

As non-fungible tokens (NFTs) dominated the crypto space and mainstream media headlines throughout 2021, investors holding CryptoPunks and other NFTs minted prior to 2018 were finally rewarded for their patience . Meanwhile, newer programs like Bored Ape Yacht Club and Art Blocks Curated have some rare pieces selling for millions of dollars.

Despite million-dollar sales of select NFTs and record-breaking sales on marketplaces like OpenSea, data shows that most of the lower-priced NFTs and lesser-known projects on the market are not adding value, meaning This makes the industry quite illiquid. Based on data from OpenSea, a recent Bloomberg report found that 73.1% of NFT assets had only one transaction in the past 90 days.

The number of transactions of assets on OpenSea Source: Bloomberg

This statistic is concerning because investors looking to purchase NFTs pay, on average, well over $100 to mint a new NFT and pay for the gas required to transfer that asset.

Chromie Squiggle #7583 has now sold for 922.5 ETH ($2.8 million) after being bought for 0.25 ETH ($750) 8 months ago.

— Farokh.eth (@farokh) September 21, 2021

“Maybe 90% of collectibles minted today are useless and pointless,” Nonfungible COO Gauthier Zuppinger said in comments to Bloomberg.

Regarding "successful" NFT investments, Zuppinger said:

“99% of successful NFT investments are in the right circles, with the right information at the right time. In the NFT space, you’re always going to get frustrated with missing out on a $1 billion opportunity.”

“The NFT market is dead”

The number of deals on the market further suggests that the NFT space has cooled off significantly from its August highs.

NFT Sales Quantity Source: Nonfungible

According to Nonfungible, the number of daily sales across all NFT marketplaces fell from a high of 138,109 on Aug. 30 to 42,372 on Sept. 21.

A similar chart pattern can be seen across multiple NFT market metrics including dollar value of completed sales, active market wallets, primary market sales, secondary market sales, unique buyers, and unique sellers.

These market developments caught the attention of podcast host and Twitter user Dennis Porter, who believes that the latest data in the NFT space shows that "the NFT market is dead."

As I've always predicted (despite the backlash from everyone, including Bitcoin supporters), the NFT market is dead.

The average price of NFTs has dropped by more than 99%. Liquidity death has arrived. Sorry to say that this marketplace is a scam.

The pull-up is complete.

— Dennis Porter (@Dennis_Porter_) September 20, 2021

According to Bloomberg, for the activity still taking place on the market, “the most actively traded 3% of collectibles account for 97% of all dollar-denominated sales,” suggesting that the NFT market is behaving much like the broader altcoin market , in the altcoin market, a small number of coins get most of the trading volume.

Overall, these developments suggest that the NFT industry's recent bull cycle may be drawing to a close, and that liquidity in the NFT market may take a while to increase significantly, especially given the recent downturn in the broader market.

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