NFT's are the latest internet hustler fad. The potential for huge profits with minimal work have enticed thousands of people into get into NFTs, producing and trading. But, new research evidences a large downtrend in NFTs overall.
With this loss of buyers, a fundamental principal of economics factors in. With less demand, and no large change in supply, prices began to fall. The average sale price of an NFT dropped below $427, a huge decrease from the peak of $659. Other than a drop in buyers, some address this change to increased surveillance from the SEC, or even the war in Ukraine.
Instability in the NFT market is to be expected though. Like cryptocurrencies such as Bitcoin, it has some practical uses, but the largest purpose is in the trading, and stock-like price trends. This of course, gives it intrinsic volatility and unpredictability.
The largest and main source of paying for NFTs is Ethereum, the second largest cryptocurrency behind Bitcoin. Tying the cost of NFTs to something as potentially unstable as a cryptocurrency layers the value insecurity of them. A tank in Ethereum could potentially cause a tank in NFTs as people sell Ethereum.
Even the volume of NFT transactions in down considerably - in the months from January 2022 to April 2022, sales went down from 948,000 to 635,000.
Overall, the hype behind NFTs has largely died down. Because of the nature of NFTs and the cryptocurrency it is tied to, its unpredictability had drawn people in at the prospect of making a quick buck, only to realize that not everyone can be making millions overnight.
Credits:
Created with images by fotofabrika - "Close up photo of bitcoin crypto currency" • Engdao - "Stock crisis red price drop down chart fall - stock market graph analysis or forex graph business and finance crash money losing moving economic investment loss"