NFT transactions stabilise after 2021 boom, report reveals

What

A report by blockchain platform Chainanalysis on the state of Web3 has revealed the growth of NFT transaction activity has levelled off following the explosive growth seen in 2021

Why

The report suggests that the period of reduced activity can be said to coincide with a decline in interest in NFTs generally

What next

Whether NFTs can recapture the interest of institutions and buyers moving forward remains to be seen, the report concludes

The story

According to new data revealed by Chainanalysis, NFT transaction activity has begun to stabilise following a year of explosive growth in 2021.

Since the beginning of 2021, NFT transaction volume has grown significantly, but this growth fluctuates. According to the report, collectors have sent over $37 billion to NFT marketplaces in 2022 as of May 1st, just shy of the total of $40 billion sent in 2021. 

However, it goes on to state that since 2021 activity has remained largely flat aside from periods in August 2021 and from January to February 2022 driven by the launch of popular NFT collections and new marketplaces.

Following these spikes in activity, NFT transaction activity declined significantly beginning in mid-February, dropping from $3.9 billion the week of February 13 to $964 million the week of March 13 — the lowest weekly level since the week of August 1, 2021. 

While the NFT market began to recover in mid-April, however, and is now approaching the weekly volumes it hit earlier in the year,  whether they can recapture the broad public interest achieved in late 2021, and whether this leads to increased transaction activity or rising prices, remains to be seen, the report concludes.

To learn more about NFTs, visit our learning resource here.

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