I was looking through some on-chain data and happened to stumble upon some stats on NFT sales and my genuine reaction was; how is this shit still pulling these numbers?
I've talked about NFTs on multiple occasions since they became popular and I've always taken the stance on the technology having a future in consumer protection, enhancement of public records and also within the ticketing and events industry.
We are essentially looking at something with so much flexibility of value that it can solve major problems across varying sectors.
But NFTs are not popular for any of these, at least we could say “not yet.”
What we have is majorly speculative buying of random art collections with hopes of a social campaign turning it into a big deal for profits.
In itself, this isn't a problem, it is always in human nature to gamble and hope for luck(God?) to be on their side.
NFTs trading has been about collecting rare items and hoping they become more desirable.
This has led to pretty insane trade volumes over the years, associated with the supposed assets — which are just pictures with blockchain references.
So far this is an industry that has attracted over $66.53 billion. Make no mistake, it isn't all organic as data reveals that approximately 53% of the volume is wash trading —essentially fake trading activities by insiders to manipulate NFT prices and make them appear more desirable to the general public.
But what financial market is without its own set of wash trading activities? Market makers do it all the time across varying sectors, so the bottomline is that at the end of the day, there's volume, and someone is willing to risk having to know what a jail cell smells like because there apparently is a market, hungry for NFTs they can bet their life savings on to sell to.
$839 Million for a Story of Non-fungibility and Fun
In the last 30days, NFT sales saw approximately $839 million in volume to which only 24.9% is considered wash trading.
Impressive numbers if you ask me, all things considered.
But what I find most interesting about this data is that 2024 was the start of something that looks like a comeback for NFTs, after practically being a bad investment train in 2023.
If we take a little trip into the history of NFTs, 2021 was the year mainstream markets adopted NFTs with the largest sale ever being the Beeple's digital artwork "Everydays: The First 5000 Days", which sold for $69.3 million in March 2021.
Then came collectibles like NBA Top Shot and 2021 saw $15.70 billion in NFT sales to which over $1.6 billion was recorded as profits amongst traders.
2022 had even higher sales volume reported to be over $23.77 billion but with a much lower profit of just $466 million.
In 2023, NFT trades ended the year with a $241 million loss, and almost everyone has since called its death.
Whilst there's substantial evidence that the current state of NFTs leans too much on speculative investment and effectively not sustainable long-term, the Non-fungible asset market is not dead yet.
Recorded volume in 2023 was approximately $8.7 billion and in 2024, we saw $8.8 billion. But unlike 2023, 2024 saw $41 million in profits for NFT traders.
Surely, that's barely 0.4% in profit, when we compare the volume, but it's a break into a positive trend regardless. So whilst I generally don't believe in the “for profit” aspects of NFTs, but rather, its role is ensuring data integrity in major sectors, NFTs remain a sector of interest amongst crypto investors and with the right developments, we could see some new waves within the industry.
Posted Using INLEO