In the past 30 days, the NFT market has had a little bit of a cold atmosphere with daily volumes falling off the cliff in tandem with crypto prices thanks to a range of undesirable global fundamentals and technical indicators.
According to data by NFT analytics platform NFTGo, the total USD volume of NFT sales globally has dropped by 85% in the last 30 days.
This negative data has not however hampered growth by the NFT market. As of writing, the NFT market valuation has grown past $16B, growing by 33.6% in the past month.
Fronted as the hottest sector in the cryptoverse, the NFT sector has witnessed a meteoric surge in individual and institutional investors given their uniqueness, non-fungibility, rarity, and verifiability.
Brands from different areas including gaming, art, sports, media, and entertainment have been filing Trademarks for the NFT space. Companies such as Adidas, Nike, Givenchy, Disney, McDonald’s, Pepsi, TIME magazine, Nvidia among others have projected NFT-related ventures.
With such growth, one would then ask what’s leading to a drop in daily volumes? In the past few weeks, the NFT ecosystem has been embroiled in a string of hold-ups with authorities. First, there has been the issue of authorities such as the IRS targeting NFT owners, whom it plans to net in the Tax filing season. This is seen as having impeded the urge to sell digital collectibles as owners have to pay capital gains tax.
Authorities have also been restricting promotional ads for NFTs, especially in countries like the United Kingdom and India. Given that a significant number of NFT buyers are lured into the space through advertisements, the recent censorship of crypto and NFT ads has had a role to play in receding daily transaction volumes.
Fraudulent schemes targeting NFT owners such as the recent phishing attack on OpenSea users that left NFTs worth $2 million stolen have also deterred the ecosystem.
So is a drop in volume generally good or bad? As per NFTGo, The number of NFT HODLers has surged by 15.57% in the past 30 days, suggesting that most NFT owners prefer to keep their NFTs which is historically good for value.